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Technology Stocks : America On-Line: will it survive ...?
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To: PAL who wrote (5105)10/18/1997 8:30:00 PM
From: jeff nightbyrd   of 13594
 
AOL's valuation teters between it's fundamental over-valuation and the fact that it has almost established itslef as the Coca Cola on the Internet. Many companies, including Coca Cola, used hype and a little creative book keeping to build themselves into giants. We may one day recognize that AOL with 20,000,000 subscribers is worth twice it's current valuation from advertizing revenue alone. One day they may give the service away like Yahoo.

I've shorted this stock several times and have been wrong. Despite what I perceive to be AOL's fundamental value, I think the institutional investors may drive this stock way down after the next quarterly report. There a smell of fear in the air. In the near future the fund managers with their herd instincts may dump this stock with the rest of the misunderstood tech market.

I've also noticed that in this discussion group people's personal reaction to AOL greatly colors their investment opinion . For instance I haven't shorted Yahoo much because I like and use their service. I tend to think AOL is dubious because a few years ago my bank account kept getting billed after I had cancelled the service - I found out when I got a bounced check notice. In the end I had to close the bank account because I couldn't get AOL customer service to halt their illegal extractions from my bank account.

That's a rather meaningless story except it illustrates the sense of the sophisticated computer users who regard AOL as a smarmy service for know nothing neophytes. If I short AOL again it won't be because I use their promo disks for coasters, it will be because I think the fund managers of the "351" institutions are going to get nervous.

good timing to all,

jeff
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