HI Larry: well hope you luck, I had the idea you were long on her
at the time..and in the last week she has really taken a beating,
I don't really short sell, I play a short position with puts, and
that does not effect the price of the stock. Keep in mind AOL has
done a lot of PR but is not all that big, 8 million customers is
a very small percent of the web. As for demand if you give something
away there is always big demand, most of her sign ups last month
were free trial software. She is not an AT&T, or a MCI or a Sprint,
she rents backbone..has a cash problem at this time, under the very
best of conditions she could not show a profit untill 98, and by
then it will be to late..buy her after she goes chapter 11,
when she comes out of chapter 11 if I'm still around I'l likly get
some, but not before then. In the next month or two the D.A.s will
use her to make a name for themselves..she has no mussel like the
really big companies..they are going to slap her around like a
dead fish.
BTW I play a lot of calls on stocks going up, I'm about as long
in the markt as I am short,but on this one I don't worry about
losing..( in the last week I done hit her so hard and hedged, my
bets that I'v locked in profits, and all puts have better than
doubled, and I'm out in april heavy and it's all paid for now
by what I made in the last week ).
You want to know who got hurt..the feb 40 calls who bought into
the hype the bulls put out and paid 5-5/8 for the calls, last week
today thoes calls closed at 3/4 , down 4-5/8 for the week, 804 of
them dumbed out today in as much as the contrats leverage you out
by a factor of 100..thats like having a 55.80 stock drop to 7.50
on you in a week ! they got hurt ! heck since friday the feb 25 calls
lost almost half their value. What I can't understand is how come
they hung on so hard seeing her slide every day, and by the way
that slide got a little faster today. I have no idea of were she
will stop between now and april..but by next year I expect she
will come out of chapter 11 at 8 or 10, then run to 15, then
settle back in like Kmart, as a 10 to 12 dollor ride, and be with us for a long time, but IMHO she has had her day in the Sun.
While your waiting to pick her up on the low end, you can get
some april 20 puts, as right now they haven't been picked on very
much, and are still cheap..every one ran to feb and march and the demand on puts there has run them up, and I hope it continues,
but the best prices are now in april, any way when you think she has setteled in, sell your puts and let them help pay for your stock.
Jim
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