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: Kerry Phineas who wrote (9039)	3/25/1998 10:43:00 PM
From: Robert Lawkins	Read Replies (1) of 13594

I agree that the price of AOL is ridiculous. What do any of you think the share price "should" be? I think you can safely divide the market cap by 5 to come up with a reasonable valuation. This is a company that has over 12 million customers and doesn't have any significant earnings to date, nor is it expecting to down the road. At what point is this company actually supposed to be significantly profitable? Is its move to an advertising/media revenue model ever really going to generate the revenue to justify a anything near its $14 billion market cap? I'm interested in hearing how. On the ISP side, it seems that the price competition is going to get rather fierce and the business has very slim margins to begin with. The business is "growing" based upon subscriber growth but to what end? Just because you are spinning your wheels faster and faster, doesn't mean you are actually going any where. What is the fascination?

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