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: Alec Epting who wrote (2652)	4/2/1997 6:17:00 PM
From: James F. Hopkins	of 13594

Hi Alec: AOL/CSRV would be a long way from a monopoly..in fact it may be a way for AOL to survive. This tread was started as people had doubts AOL could survive, making an old BB system into an internet system has it's problems. --------------------------------- Here is what I see at this time, "first there may not be a merger" "if" it happens I first said 1 AOL share for 3 CSRV. Have since then I took a rough look..AOL has 95m shares out book value only .41, cash 1.37 , sales per share $12.92 ( supposedly as in the past their accounting left a lot to be desired ) AOL also has a .54% dept. CSVR 92.6 M shares..Book value $ 7.23 ( much higher than AOL ) has $1.90 in cash per share ( $ .50 ) more than AOL..and has sales of $ 9.66 per share..25% less than AOL. AOL can toot membership, but only 25% more on sales..and CSVR has no dept. but the better book value..cash..and no dept standing of CSVR, against the 25% better sales of AOL..and you get..what ? Sales AOL 1235m sales CSVR 888m. dif 346m BOOK aol 38.95M Book CSVR 655m dif (626) Cash AOL 130m cash csvr 174m dif ( 44) lets just forget the debt..value wise CSVR has a better bottom line..AOL will not get her cheap. At best I now see 1 AOL for 2 CSVR..and AOL getting a steal at that. What's it do to the shares outstanding, runs them up to 142.5M at a 45 close..with 95m..she winds up with shares worth $30.. and the CSVR get $15 for theirs, in the long term it may be good for them both..AOL has to do something..so Does CSVR.. will it change the question.."Can AOL survive..not really..there is still that question..more and more local ISPs are coming on line, lumped together they have 3 times the users than all the Big cos do if you lump them. It may give AOL a little longer to live..and cause a dance between her and Bill Gates..but in the long run..ISP service is going to wind up in the hands of the local ISP..or the "phone companies" New stuff coming out that just may put your local phone company or cable TV provider in the drivers seat, it's a fast new digital technology that won't work the way the traditional dial in does..so maybe that's why AT&T and Sprint, & MCI have kinda been holding back..heck any one of them could have taken out AOL by now if they wanted to..but I don't think they see any profit in spending that much money, when something new is right around the corner..that's the problem in this sector..about the time you get it built..it's obsolete.. ----------------- Well the heck with all that, "If I were long on AOL..I would short against the box for right now" until the smoke clears..it means you don't make any up side until you buy it back..but it also means your profits are locked in..if she goes up you lose only the short term gain..( small risk to pay for something as unsettled as this is ) But if she dives you can arbitrage out with you present profits intact. Jim

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