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: Muizz M. Kheraj who wrote (5363)	10/30/1997 3:46:00 PM
From: Brent D. Beal	of 13594

You've got to know what moves this stock. It's definately not earnings--so there'e no worry on that front. After all, what kind of earnings is AOL going to post? What, $.12/share if they meet estimates? Let's say they post $.25/share? Let's see, that only gives them a forward P/E of 80--what a buy! The fact is earnings don't move this stock, it they did, it would drop when earnings are restated, which is a fairly common occurrence that will probably be repeated. Subscriber growth is what moves this stock--that and increases in advertising revenue. So what are the odds of AOL surprising on the upside in these areas? Next to nill, in my opinion. AOL hasn't gained that many customers--past press releases are ample evidence of that. And advertising revenue? Who knows. . . If I thought it was a 50/50 gamble, I wouldn't hold puts over earnings. I think there is a much greater probability that AOL will dissappoint (even if they do message the books until $.12 cents pops out, although they will probably just have to restate it) and the stock will move down. In my opinion, AOL's days as the mania of choice are about over. You shouldn't have wimped out.

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