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Technology Stocks : America On-Line: will it survive ...?
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To: chenys who wrote (3529)6/23/1997 12:15:00 PM
From: steve lipson   of 13594
 
>Steve: Are u the only short seller of AOL in this thread?<

I'm sorry if I haven't been clear. I was bullish about a year ago when I bought the stock. I'm still holding with close to a 50% gain.

I was trying to make the point that short selling by pros like the Feshbachs is a difficult business, at best. They lost a lot of money at it in the 90s, even though they know what they are doing.

I don't think the bears here recognize all of the traits a good shorting opportunity requires. Certain aspects of the AOL story make it look like exactly the kind of stock a bear needs to steer clear of.

-- Too much bad news is too well known. This is not a stock where investors are infatuated with the story and ignoring obvious failings. This is a stock where some investors (on this thread, at least)are so focused on the failings that they find it impossible to even imagine that the company might sometime in the next couple of years figure out a way to generate a meaningful profit.

-- There's substance along with the smoke and mirrors. A customer base of 8 million, real revenues and the newfound ability to attract marketing partners willing to pay tens of millions. For all the negative surprises stockholders have endured, there have been some upside surprises, too. This is a stock that can go up without warning, too. Ouch for the bears.

-- Hype don't bounce. Iomega plummeted and has since stayed down much closer to its lows than its old highs. Bre-X plummeted and disappeared from view. AOL has somehow managed to recover from having its bubble burst. When the shorts are right that doesn't usually happen.
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