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Technology Stocks : America On-Line: will it survive ...?
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To: Yikes who wrote (4939)10/3/1997 12:50:00 PM
From: Keith O'Neill   of 13594
 
The price chart on the link below doesn't show an institutional
sell-off last December so that would be new behavior if it happens.
On the negative side though the volume chart really shows that AOL
trading volume has been declining steadily over the past year. That
means to me that the stock is about half as liquid as it used to be.
With heavy institutional ownership AOL has lots of potential to go
into a power dive.

www1.wsrn.com

I heard that a small investor should never be long in a stock owned
mostly by institutions because A) the stock can't attract many more
big investors, and B) a smaller number of owners control the stock
price and will clean the small investors clock if they can. Another
danger is that institutional investors sometimes have personal
contacts inside the company and are the first to hear news. They can
send the stock price reeling before the small investor can react.

I can't understand why institutional investors would invest in a
money losing business with a book value of 71 cents selling at $75.
AOL had to sell it's only profitable business to raise cash, what
immediate profit potential do they have left? Institutional
investors are more educated and diligent about fundamental analyses,
what formula could they be using to value this stock? Have they
re-run their formula lately?
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