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Technology Stocks : America On-Line: will it survive ...?
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To: Dom B. who wrote (4401)8/9/1997 5:09:00 PM
From: J.S.   of 13594
 
Dom,

AOL tanked 1 9/16 on Friday. Not so bad. It is ironic that what
should have been one of the most volatile days had AOL in the
narrowest of trading ranges for most of the day, almost all afternoon.

I read your options post. I think you should reply to Thomas
Donald at:

techstocks.com

Basically, the real problem for AOL down the road, what could really
be a dreadful situation for its shareholders, is the current deficit
(current assets minus current liabilities). Many AOL supporters
assume they can spin-off ANS. With the market the way it is, these
spin-offs are tricky propositions and take a long time to bring
to fruition.

Your wife is definitely on the right track though. The course of
action is not to buy AOL (risky....very risky...not good) but
to buy Compuserve stock. Did you know that CSRV has a book value
7 to 8 times that of AOL yet AOL trades at 6 to 7 times
CSRV? CSRV will have about 250million in cash and its working
capital will just about negate AOL's deficit.

Does anyone really believe AOL thought it could get all of CSRV
for a billion dollars of its stock? That means all the assets both
liquid and hardware(which AOL sorely needs), the network services
business which is eons ahead of ANS, the worldwide POP's where AOL
has not even breathed yet, the over 5.3 million subscribers (including that of its licensee and the ISP, Sprynet).

Joe
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