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Technology Stocks : America On-Line: will it survive ...?
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To: Saul H Rosenthal who wrote (10592)7/12/1998 10:01:00 PM
From: Keith A Walker  Read Replies (1) of 13594
 
You are correct Saul. However, quarter to quarter, aren't AOL's earnings estimates only running at about a 10-15% increase? With a P/E of 300+ you really need to be doubling earnings every quarter to keep this type of P/E attractive. P/E is not everything, but earnings, in the end are. And Wall Street will punish those companies who miss earnings or raise any doubt about their future prospects.

Of course, there are other factors to consider. I believe AOL's lead as an ISP is eroding on a daily basis. And their issuance/sale of 5,000,000 new shares from their universal shelf registration, without any real explanation, the proceeds of which were placed into an interest bearing account, strikes me as a little odd.

Needless to say, my short position is not paying off, but I am less scared about being short on AOL than long on CSCO.

Regards, Keith
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