America On-Line: will it survive ...? Message Board

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Technology Stocks : America On-Line: will it survive ...?

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To: Allen Plyler who wrote (2634)	4/1/1997 6:41:00 PM
From: jack rand	of 13594

Much of AOL's move today on rumour started by a newsletter that AOL would "make a bid for Compuserve". Seems far-fetched. AOL's balance sheet and cashflow certainly can't support debt. Stock? At current $10 CSRV's value is $1b. 2m domestic subs. AOL says it pays $60 to get a new sub. $60x2m= $120m. Systems as incompatible as u can get. AOL is Stratus with home grown software. CIS 250 WIN NT servers with code rewrittem from ground up 2 years ago. Networks have significant overlap. CIS has $175m cash + $367m plant and equipment. IOW more than 50% of its market cap. Trade those hard assets for AOL stock backed by only $19m tangible book value? Premium would have to be huge! Not to mention why should AOL go up on such news? It already was awarded premium for CIS abandoning the mass market.

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