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: jack rand who wrote (6085)	11/23/1997 11:30:00 AM
From: Steve Robinett	of 13594

To anyone, Just for the sake of argument (and I'm sure I'll get one), I tried to ballpark AOL's current value using the MOST generous assumptions I could allow. Assuming 12 million customers with Compuserve at $17.37/month plus 16% "Other Revenue", I get about 3 billion in revenues annualized. At 118 million shares, that's about $25.42/share. Because the question of AOL's ability to successfully leverage its subscriber base is still open, give them a market cap of 2.5x revenues--a per share price of about $63. Since AOL has a large "faith component" among Wall Street brokerage houses, give AOL a price anywhere between $60 & $85 per share and you can probably make some kind of argument to support it--but $100 to $125 a share! What is the street thinking?

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