SI
SI
discoversearch

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor.  We ask that you disable ad blocking while on Silicon Investor in the best interests of our community.  If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.
Technology Stocks : America On-Line: will it survive ...?
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  
To: John Wu who wrote (916)1/2/1997 10:28:00 AM
From: John Howell   of 13594
 
John,

Thanks for your post.

I wish I had the trading savvy to make money doing some intra-day trading on some of the stocks you mentioned. I tend to do better trying to understand the fundamental nature of a business and then trade with a long term outlook on what their prospects are for making profit (which is why I am short AOL; their long term prospects are dismal in my opinion). Stocks like Zitel scare the hell out of me because they trade almost purely on hype and momentum and it is easy to get killed on margin when they enjoy a rise on "irrational exuberance".

I looked at the AOL historical chart and your advice to close out a short position looks right on the money considering the support the stock has had in that range. However, there are a couple of scenarios that bear consideration if you are thinking about going long somewhere in the mid 20's.

1) How many times can Case play the hype game before he loses credibility with the street? If AOL's "business model" fails to pan out over the next three months you can bet that all the fund managers and insiders will be gone. And I would bet that the smart ones start bailing out before the shit hits the fan. Without institutional support this stock will blow through 25 and never make it back.

2) Several brokerages have substantial stakes in AOL in the hope that they will get the next chunk of underwriting business when AOL inevitably has to go to the street for cash. Assuming that AOL's revenue projections aren't reached, how many of them will want to take a beating on the stock just to get the business?

The first quarter of 97 will be the litmus test for this company. If they can't live up to their own hype, I think that they are going to have real problems. It is my opinion that they have been successful in hyping an inferior product to an inexperienced public. As people gain experience on-line, they will go where the value is.

Regards; Hope you have a great year trading!

John

P.S. If you have time, let me know your short term strategy on the various y2k plays.
Report TOU ViolationShare This Post
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  

HomeMailHotSubjectMarksPeopleMarksKeepersSettings
Terms Of UseContact UsCopyright/IP PolicyPrivacy PolicyAbout UsFAQAdvertise on SI
© 2026 Knight Sac Media.  Data provided by Twelve Data, Alpha Vantage, and CityFALCON News