Amazon Shares Drop Ahead of Cash Crunch Conference

The debate swirling around Wall Street over whether online retailer Amazon.com (AMZN Quote) will be able to pay its bills as it pushes toward profitability will gain a full airing Wednesday when the New York Society of Security Analysts gathers to discuss the company's financial health.

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The debate, which has polarized analysts who follow the company, centers around the health of the company's balance sheet. Management has said it is confident Amazon has enough cash to pay its bills -- a view many analysts subscribe to. But others question whether the company's vendors will continue to supply the necessary credit on the terms the company has enjoyed up to now.

The latter view has been famously expressed by Lehman Brothers debt analyst Ravi Suria, who predicts the company will face a credit squeeze by the second half of the year. When Suria released his report, the company shot back that it was "silly and chock full of errors."

Wednesday's forum will debate how credit managers at Amazon's suppliers will "make the decisions that count." The stock dropped in morning trading on the latest rumor that Amazon is considering a bankruptcy filing, a claim the company flatly denied Wednesday.

Representatives at several of Amazon's largest suppliers, who spoke on the condition of anonymity, told TheStreet.com that they had neither stopped shipping to the company nor tightened credit terms, although they say, of course, that they will be watching the situation closely.

Amazon shares lately traded at $10.75, down $1, or 8.5%.