AOL, now I get it Message Board

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Technology Stocks : AOL, now I get it

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To: C H Prachmalnykoff who wrote (298)	1/16/1997 9:47:00 AM
From: yard_man	of 496

CH, I don't think anything will really come of these suits. However, with the previous trouble they had with states AG offices over their preliminary plans to make the new pricing plan compulsory. This is an additional piece of news that goes into the "time-lag integrator" of the mass market psyche. I think it bodes well for shorts. Any temporary run-up on another tout by MM's above the 40 level and I'll short more. This problem that AOL has is significant from a fundamental perspective. If people have trouble getting on they tend to stay on to not lose the connection, and why not it's a local call, right? Well this just makes the problem worse requiring further investment to satisfy current subscribers -- I read yesterday that AOL is planning on spending an additional $250 million in the next two months to accomodate the increased usage resutling from the flat-rate plan. Here's my thoughts, ISP's have done well because they have rather subdued growth. Flat-rate works as long as they've kept pace with the expansion. Get behind as AOL has and the nature of the thing works against you, very tough to catch-up as frustrated users try, retry and clog the works. People who pay for services are determined to get them in an almost irrational fashion. I know that I'm not as crazy as some, but sometime when I can't get on SI for whatever reason, I don't quit after only a couple of trys -- I'll get discouraged probably only after the 4th - 6th time. Shorting this stock is not without risk. AOL stock has its die-hard evangelistic fans and a lot of willing investors who just look at charts and see how far down it is from its peak and want to buy the story. I let other people know what I'm thinking, but I wouldn't recommend anyone make very large bet on the near-term decline of the price.

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