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Technology Stocks : America On-Line: will it survive ...?
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To: Thomas C. Donald who wrote (3956)7/11/1997 4:38:00 PM
From: steve lipson   of 13594
 
Thomas: I was first trying to show you the impact of you using the wrong valuation tools. Use the right tool, pick an absurdly low bogie like $2b just for kicks, compare that with your estimate, and you should be able to see that your methodology doesn't even get you into the right neighborhood.

I haven't seen anything new about CSRV, but don't go trying to hang a $2 billion market cap on AOL based on comparing price-to-sales ratios for the two.

CSRV has nowhere near the growth rate -- and remember one of the the biggest holes in your analysis has been improperly valuing growth. CSRV also has no demonstrated ability to land high-margin marketing deals. CSRV is a distress sale pure and simple. AOL could sensibly be valued at multiples several times greater than CSRV.

Hey, you'll probably think this is hysterical. The market has already been doing just that by putting a much higher valuation on AOL. How did they know?
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