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: Flan who wrote (356)	10/15/1996 7:51:00 PM
From: Bharat Bhatia	of 13594

David, I agree 100% with you. Stock had fallen precipitiously and was due a bounce back and will resume it's decline soon since they have fundamental problems. The astonishing thing about AOL 's stock is that it has hit 24.50 twice before. This was even before the price competition from Microsoft; which I feel isn't fully factored in the stock price. Besides, I don't trust their comments that their marketing campaign will fuel subscriber growth. You are right, they are wasting their marketing $ customers won't stay long term. Their accounting practices are dubious inducing artificial earnings in trying to win favor with investors. I simply can't understand why the big brokerages issue buys on AOL or try to prop up the stock price everytime the stock takes steep drops. Growth in subscribers is not the same as earnings growth since they give so much free hours and customers eventually drop out. I guess the stock will remain artificially high until AOL cannot hide anymore they are having cash flow problems. In fact I feel that their marketing push is a risky gamble which if it flops will seriously jeopardize their viability. Bharat

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