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: Carlos A. Lima who wrote (93)	8/31/1996 3:24:00 PM
From: Mark The Trader	of 13594

Your profile says you have been investing for 1 year and your one year of experience thinks that " the pattern in which it has been trading during the last several days is typical of professional accumulation" You also say that everyone hates this stock. Most of the people who dislike this stock are people on -line who know more about the internet then most of the analysts who have buy recommendations on this dog. Your one year of trading also enlightens us to to your other facts, "Its downward momentum has stopped, and its a company with good earnings". Let me give you some "facts", you dont have a clue about where the momentum of this stock will be and neither do I or any one else here, we all basically guess based on our own analysis. The trading pattern of AOL over the last several days has very little to do with professional accumulation. The negative factors about AOL are not discounted in this stock yet, too many analysts are still to optimistic on this stock , this dog trades at over 100 times current earnings and if you think that they deserve a multiple like that then I think you should do some more research. I see people say " they will have over 10 million subscribers next year and will meet all those earnings projections. Well they spend so much damm money on advertising and their accounting is very very aggressive ( it reflects earnings early and defers costs out)so that at some point it will catch up with them. This business is very competitive and the rate at which people will leave AOL for a better service is going to get closer to the rate at which new subscribers sign on. AOl is to pricey, and for real Internet access they suck. You also have telephone and cable companies getting into the business , as well as the many local ISP's which offer a great internet hook up for 1/10 of what AOL would cost. AOL is good for chat( if you dont mind being censored) and e-mail,thats about it. I really dont care if they offer magazines and other little perks on-line , you can get most of this stuff on the Web . So while they may have a lot of revenues and subscribers compared to other services , they cant earn enough to command these high current and forward P/E ratios. Mark

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