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: bobby beara who wrote (4187)	7/29/1997 12:59:00 AM
From: CLAUDE JOHNSON	of 13594

<<I bought puts on this when it was above 70. Can anyone tell me why this was a bad idea? >> Bob, No one will tell you why this was a bad deal, because even Sam will see this as a good deal seeing the stock is around 65 today. Sam and all, Very interesting discussions. Gotta believe earnings will just meet or they will dissapoint. With all those companies out there trying to hide their extra growth through deferred revenue (to hit rev and profit growth and preserve some for the need to hit same future growth #'s), it will be interesting to see AOL's report. As an accountant previously in the Big 6, I will provide a fairly detailed analysis of the "shenanigans" should there be any. Will be interesting to see if they improved their Balance Sheet strength ... which I will guess has remained very weak with a Current Ratio below 1!!! Genuinely thankful to Sam for his posts. AOL is helping some businesses, that is obvious. The cause for alarm for me is: 1. Balance Sheet Beyond Weak! 2. Management admitting they're mistakes in revenue in the past, only to make the same mistake by reversing this for the future (as sales ARE growing and the commissions WOULD payoff soon). Proper treatment would have been like renting real estate in tough times. Commission-based with 2-month's free rent, then both rent and commission applies. This gets rid of the games that can be played by the customer (advertiser). 3. The Price Is In The Stratosphere based on year 2010 earnings!!!!<G>. Honestly, who would pay 80 times next years earnings for a company who can't find the black ink yet? A lot of hype is in the price, and will be removed in a correction in, dare I say, 'short' order! There are other reasons, but I won't continue to bore others with the facts until a later post.

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