--Bazmataz
You comment, Even with Strong Buys being issued, the others are up over 4% while AOL is barely managing 1%
At the moment, AOL is up 1-5/8 from 94, about 1.75%, roughly what I would expect relative to a 4% move by AMZN, EBAY and YHOO, all of which are about twice as volatile as AOL (which itself is twice as volatile as MSFT).
A more important issue is volume. Even with all the strong buys (and one downgrade yesterday by someone, I've forgotten whom), there is feeble volume, well below the monthly average. Indicating AOL isn't on peoples "Have to own" list at the moment.
AOL has the obvious fundamental issues--broadband, free competition, content competition from non-AOL web sites, etc. In addition, there is a disconnect between company fundamentals and the stock's share price.
Future growth is also an AOL issue. People on this thread keep pointing out that AOL will have 40 million subscribers in 3 years as though that's a positive. 40 million subscribers in 3 years is a 30% compounded growth rate--much lower than previously assumed by the market, which was looking for something over 50% per year.
The market has started to price these concerns into AOL as the stock has come down from 175 to the current level. Whether the price will get discounted further is obviously a matter of opinion. My own guess is we've seen the low for awhile around 76.
Best,
--Steve |
