The darkness at the end of the tunnel......Lord Darley, I can cite literally hundreds of historical precedents of tech stocks that have shot to the stars on speculation that they would dominate a particular technology sector. Right now I can think of only two companies, Intel and Microsoft, that have what I would consider an almost monopolistic position in their respective industries.
For all of their blather, AOL is a communications company. Whatever advertising and transaction processing revenue this company generates will be dependent on staying in the communications business. IMO, there is virtually no chance that AOL will survive the access wars. They simply are not positioned, technologically or financially, to do so.
Most fund managers, MM's, and speculators have little or no technological savvy. Their decisions are based on numbers, news, or even worse, self interest related to peripheral market business. Their focus is on the next month, week or day.
Look at the history of Apple. Initially this company had the potential to carve out a postion that was sustainable for decades. Instead, a reliance on proprietary technology in the face of a public that demanded open standards and cross platform compatability brought them down. Wall Street was loath to let go of their high flyer, and continued to flog the stock as Apple's competition positioned for the future.
AOL is in a similar situation. Case's outfit is based on an already outdated technology. Combine that with a corporate culture based on deceit, arrogance, and phony bookeeping and the future of AOL becomes clear. I can gaurantee you that there will be plenty of "insiders" that go down with the ship.
P.S. If you are playing this one short term, stay long till the low 40's, short till 34. The trend channel advice posted earlier on this thread is worth reading. |
