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: yard_man who wrote (2981)	5/5/1997 5:09:00 PM
From: Xpiderman	of 13594

Time to see another major short squeeze??? AOL traded @ 52 - 53 level in after-hour trading. 14:45 ET **** from briefing.com AMERICA ONLINE (AOL) 49 5/8 +2 3/8. Hambrecht & Quist is advising investors to go long shares of the world's leading online services concern, citing the company's name recognition and its ability to generate tremendous ad revenue. The firm's initial "buy" rating and 12-month price target of $60** a share come ahead of this afternoon's earnings release. When AOL reports after the close, H&Q is looking for a loss of $0.05 a share for the quarter, 2 cents narrower than the First Call mean estimate of a $0.07 a share loss. The firm expects the company to report sales of $455 million, which would represent a 11% sequential increase and 46% improvement over year-ago's $312.34 million. Judging from the the firm's comments, it is betting that AOL will continue to widen the distance between itself and its struggling competitors, which will help the company return to profitability in 1998. Specifically, the firm estimates a fiscal year 1997 loss of $0.36 a share on sales of $1.7 billion. Leveraging annual sales growth of 41%, H&Q sees a 1998 net profit of $0.78 a share. Although Briefing is not the biggest fan of America Online shares, we cannot disregard the considerable brokerage firm support this issue has recently enefitted from. And now that the company has cleared its connectivity problem hurdles, there are very few barriers which would prevent this issue from extending its recent momentum, other than the possibility of an earnings miss. Nonetheless, many consider this issue overvalued --look at the short-position-- which could set the stock up for a major fall on disappointing news or a few negative articles. Time to see another major short squeeze???

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