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: Mark The Trader who wrote (412)	10/28/1996 11:50:00 AM
From: Meghan Richards	of 13594

Mark brings up a very good point ... AOL's advertising. AOL is currently running a huge advertising blitz. Now this wouldn't typically bother me so much. But when I checked their most recent 10Q, what stuck out in my eyes is that this company is cash flow negative (and in a big way). I'm guessing here, but I suspect this is one of the reasons why the street has been punishing this stock. Another guess here ... this advertising blitz will make the company even more cash flow negative. The result may be even more punishment. I don't have a position in this stock. I have been studying it, because it's price drop from the 70's actracted my attention. Initially I liked it a lot and was looking for a good buy in opportunity. But with the negative cash flow problem, and the strong dependency on subscriber fees for revenue (which must be lowered), I'm beginning to question my desire to own this animal.

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