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Technology Stocks : America On-Line: will it survive ...?
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To: MW who wrote (5191)10/23/1997 6:41:00 PM
From: Brian K Crawford  Read Replies (2) of 13594
 
Regarding the recent strength in AOL stock price, two possible explanations come to mind:

1. It's purely a mania, fueled by momentum players and short covering

2. Investors are beginning to discount the possibility thart AOL will continue adding subscribers at a rapid rate, while adding premium pay services, and that a not-too-distant future bump in the basic, flat-rate, unlimited service to the lower $20's is not only a possibility, its a probability. (see Compuserve flat-rate offer at $24.95) And the belief may be growing that the subscribers will pay it, after the obligatory fussing sessions. And the increase in subscriber revenue will fall straight to the bottom line.

A third possibility is that both the above have some truth.

There is a fourth possibility that neither of the above are true, which I expect some of you will elaborate on.
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