In Retail Wars, Is Amazon About to Fire Big Guns?
Earlier in the week, Amazon raised $3 billion in a bond offering for general corporate purposes.
Make no mistake, it's getting the money, cheaply.
CEO Jeff Bezos is borrowing at three, five and ten year intervals of 0.742%, 1.301% and 2.601% respectively.
"Those are Uncle Sam like rates," mused Jim Cramer.
But at the end of the day, a loan is a loan. What does Amazon need with all that money?
"Amazon's taking on debt because there are so many opportunities for them to grow," speculated Jim Cramer.
- Cramer's Top Dividend Stocks 2012
- Cramer's Ultimate Growth Stocks for 2012
- Cramer's Plays on a Potential Housing Rebound
"With that amount of capital and at those prices, not only does it have a chance to put rival Best Buy in an early gave, it can go after almost every retailer that's burdened by higher debt and brick and mortar leases," he said.
"Without being bound by the credit required to finance inventory or the need to pay ever escalating rents to a Federal Realty or a Simon Properties or a Kimco for real estate, Amazon's just an overwhelmingly powerful opponent."
"The additional funds will, no doubt, allow it to build out its infrastructure so you can get one day shipping at probably every major urban area in the country."
Ironically, if you were to ask most of the retailers in this country what they could do with $3 billion, they would probably use it to buy back stock or pay special dividends.
But not Amazon.
"Perhaps Bezos wants to take over the world," said Cramer with a wink and a grin. "And at these rates he might just be able to do it!"
Call Cramer: 1-800-743-CNBC
Questions for Cramer? firstname.lastname@example.org
Questions, comments, suggestions for the "Mad Money" website? email@example.com