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Technology Stocks : America On-Line: will it survive ...?

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To: Yikes who wrote (5068)10/16/1997 11:23:00 AM
From: steve lipson   of 13594
 
Yikes, your analysis is fatally flawed.

What you looked at, apparently without realizing it, was an absurd scenario in which AOL would stay in business for one year and then close its doors, shoo away all customers and refuse to accept any more money for them under any conditions.

By your reasoning we should short all stocks. Even those that trade at clearly bargain multiples on earnings in the current market like 8X or 10X. After all, if they are only going to earn $1 a share, how on earth can anyone justify paying $10 for a stock like that?
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