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Technology Stocks : America On-Line: will it survive ...?

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To: Robert Giambrone who wrote (2702)4/5/1997 3:25:00 AM
From: Roger Graham   of 13594
 
I have not shorted AOL, yet. This stock is the biggest hyped-scam of this decade, if not the century. AOL is selling for almost 40 times book, is basically insolvent, should move to deficit equity in the next six months. The Company has never shown a profit since inception, but tried to by hold expenses in a contra-asset account to the tune of 600 million. First Call estimates for both FYE 1997 & 1998 are both bloated by analysts. Even if analysts were correct for 1998, the EPS would be 60 times for a pipe dream profit that is seven quarters out. AOL could lose 60% of its value in one day if the Fund Managers turn sour. And now they are going to by Compuserve, what with "free hours." They do have $130 in cash, but for a for a company with a 4.6 billion+ capitalization that hardly enough to send out proxy statements. Watching AOL the next few month should be very entertaining.
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