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Technology Stocks : America On-Line: will it survive ...?
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To: MileHigh who wrote (10819)7/29/1998 10:14:00 PM
From: J. P.  Read Replies (1) of 13594
 
Hi MileHigh,

Here are my thoughts on your points, FWIW,

<1- I am long so keep that in mind>

I was long also until today, I didn't want my profits to turn into a loss so was forced out by strong negative market action.

<2- I believe that AOL's recent weakness is NOT a function of those "in the know" already concluding that AOL will miss estimate leading to recent weakness.>

I wouldn't be so sure, human nature being what it is I don't discount any possibility!

<3- IMO recent weakness is simply a function of overall market weakness and skittishness about internet stocks>

There has been an exodus of internet stocks in general and AOL has been lumped in with YHOO, XCIT, LCOS and the rest.

<4- Since we have seen a nice correction, a positive AOL EPS surprise could give us a nice bump up on WED since we have no run up prior to earnings already assuming a surprise>

I wouldn't bet the house on it. When the market goes negative, I've seen companies that announce even upside surprises get torn down.
Plus, AOL already has mighty slim earnings, so nobody is going to be all that impressed by a couple of pennies.

<5- When investors want to get back into internet stocks, they will start with those demonstrating stability in sales and earnings growth, which would include AOL.>

I agree. AOL is a great company with a great business. And remember AOL is a great split play. Remember last year when it announced a split and a 2 dollar rate hike the same day? This baby went from 90 to post split 90 in like 2 - 3 months!
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