With the stock dropping and a reasonable PE, I have a much better comfort level with AOL at these levels. No matter what anyone says about the future, Wall Street will only support Hype for so long. Look at the IPO's that were suspended today. I agree that you can't compare Microsoft and AOL, however both companies are strong leaders. What are they going to do for their customers tomorrow, not what they did yesterday. Microsoft can throw money at anything right now, they have it. There is too much business out there for any one ISP to control. This is much different than history played out the automobile or even the phone. Tech is easier to market and sell to the mass. Will the full service broker survive, I think so. Will the small ISP survive, I think so. Too easy to make a move. I saw a post this morning suggesting that the cost to attract new ISP customers is between $150 - $200. Whats the end cost of the churning? If the valuation is between $1,500 and $2,500 per user, high multiple.
Microsoft could provide free ISP service, but nothing is for free. Anyone who has ever done any DD on Microsoft before might say, nothing would surprise me. I personally think that this correction was healthy for the long term investor. With the dollar rising against the yen the past few days gave me a bad feeling. Now maybe we can get back to reasonable swings (I doubt it though). Only my opinion. |
