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: Dom B. who wrote (4312)	8/8/1997 11:34:00 AM
From: J.S.	of 13594

Dom, I'm finding hard to digest your statement: "Read the Financials AOL has positive cash flow... and subscriber base is growing... Big Time..." The cash flow and current asset/liability situation is dreadful. Since when is more customers a financial fundamental? One of the biggest reason for bankrupcy is that companies grow too fast. AOL would be bankrupt if it were not for its "deferred subscriber acquisition costs" which are counted as assets. Basically, this says that a reliance on future revenues to cover these charges will keep the company afloat. This may be true (I am not so bearish about the company as I am about its stock) but it should make its creditors extremely nervous. The financials? This is a story stock, pure and simple. At these prices the story is getting old and tired and I say it is time to close this sorry chapter and have AOL stock valued on financially sound principles (this goes for much of the market too). The kind of statements we have seen here by bulls and on CNBC is all too mindful of the late 1920's and the aforementioned Bulb Bubble(tulips). Hopefully, we can nip this before it gets further out of hand. joe

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