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: Keith A Walker who wrote (10816)	7/30/1998 1:49:00 AM
From: M.J.	Read Replies (1) of 13594

<< We could be looking at AOL moving toward it's 200 day moving average of around $69. That might be a stretch, but, given the fundamental overvaluation of AOL and the financial house of cards that Case and Pittman have built, it could be a rough ride even after earnings "blow away" expectations>> Keith, I don't think that's a stretch at all. Remember.. the 200 day moving average has been pulled up by the frenzy of the last few months. Before that, the 200 day average was more like 35 and - if valued as the rest of the computer industry (50x earnings - already an optimistic multiple), a fair price would be closer to 17. So I see 35 as a very very optimistic price. I happen to think AOL is a very strong company and will enjoy future growth - but I have yet to hear any reasoning (using numbers) suggesting it will grow anywhere near its current valuation any time soon. Can anyone here offer such reasoning? (use numbers please)

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