AOL, now I get it Message Board

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Technology Stocks : AOL, now I get it

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To: yard_man who wrote (225)	12/19/1996 10:04:00 PM
From: Art Stone	of 496

<< What infrastructure does this company really have and what would it be worth to potential suitors? >> Not much. AOL has about $90 million in Computer Equpment, owns some of their office space. Most of AOLNet is leased equipment. On the other side, AOL has a long term declining commitment to Sprint over the next few years - on SprintNet's 14,400 bits/sec modems. AOL also has long-term office lease obligations. AOL's book value is under $200 million, and much of that consists of "Goodwill" and Capitalized R&D and a huge federal income tax loss-carryforward (probably the most attractive asset for some suitors). Add to that options for 38 million shares for pennies on the dollar for the insiders, and I can't see much here - other than the perceived value of AOL's customer base. Another month of busy signals and sluggish response time, and that "asset" may well wither away. One possible winner in this might be Sprint. At least in my city, the AOLNet nodes are so overloaded, that traffic has been diverted to such a large degree that Sprint's close-to-obsolete v.32 modems are also filled to capacity - which hasn't been the case in almost a year. An ever longer shot is Tymnet - since eventually in desperation, AOL members may go to the 2400 bps modems just to get online for their "unlimited" time.

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