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

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To: SJSharky who wrote (8264)2/26/1998 3:37:00 AM
From: J.S.  Read Replies (1) of 13594
 
Ryan,
"IF they can achieve the type of profit growth the street is expecting, then I believe the
current valuation is justified."

That's a big if as you correctly indicated. Even if this is true it
certainly is not got enough. Everyone has to admit that there is a good chance that AOL won't make such numbers. If if does, then this means that AOL will be worth perhaps close to 100 in three years or
so. But then people predict the stock should be worth 200 by then
because of earnings in the year 2005 or beyond. If not then it is hardly worth taking a huge risk only to have your stock value remain the same after three or four years.

If that's not enough, analysts are certainly not taking into account
the dilution that is occurring. This is one of the big reasons AOL
won't make next quarters numbers fully diluted!

Joe
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