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Technology Stocks : America On-Line: will it survive ...?
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To: (Bob) Zumbrunnen who wrote (1249)1/29/1997 12:51:00 PM
From: Art Stone   of 13594
 
<< Personally, when they say they're down to 4 million users, I'll consider that a signal to sell my Puts and maybe even buy Calls. >>

Assuming that AOL does what they plan - to have 350,000 modems + 50,000 TCP/IP session capacity by the end of June, that would leave them with a maximum subscriber revenue of roughly $70 million per month. Subscriber revenue was over $100 million for 1st Qtr 96-97. Revenues loss would be about $40 million a month after spending $350 million to stabilize the system. The additional 200,000 modems will add several million more per month on the expense side. AOL's future is heavily dependent on the advertising revenue..

AOL's total stockholder equity as of the 10-Q was under $200 million, and AOL had a negative working capital of $53 million... And that was before the promise to spend $250, then $350 million to upgrade the network capacity.
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