America On-Line: will it survive ...? Message Board

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

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To: vegetarian who wrote (5811)	11/12/1997 1:53:00 PM
From: J.S.	Read Replies (1) of 13594

Who would buy these conv. debs. at this price, on the one hand? Why should AOL need to raise potetially dilutive capital now? One explanation is the negative working capital. Eventually one has to pay off the creditors or convert the debt to long term debt. Current creditors may take less than favorable terms so as to get anything at all. Also the creditors as a whole do not want to drive to contribute to the companies demise. It may be AOL's current creditors who are the buyers of these notes in exchange for current debt. In any case, this will be the net effect whoever is the ostensible buyer. The whole deal is probably being closely coordinated by AOL underwriters/bankers so as to put AOL on a more sound financial track. I hate to admit it. This is great news for AOL. Even if these things end up getting converted, 3 million shares would be peanuts and a flight above the 100 mark would easily absorb any short selling based on this deal. My hat is off to Case & Co. He could be the CEO of my company anyday. Oh well, Joe

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