Putting aside all the exuberance and hype, this is what I think will happen to AOL shares on Monday, Jan 4 and beyond
After hour trading on Dec 31 indicates a majority of trades took place in the vicinity of 160. There were 2 large trades, each 10 mil+ in the 160 range. I also understand that some large funds have yet to buy. In that case, the demand is still there and it will provide for upward pricing pressure in the immediate future. Thus on Monday the upward pressure will persist and my prediction is that it will close around 170.
In the second week of January, small investors like us will indulge in profit taking causing the prices to drop to around 140. It may be pre empted by AOL announcing a cable deal.
And then end January will see a very good earnings report, a good rate of increase in membership, AOL's expansion in the worldwide arena etc. etc. These will provide the impetus for the price to go to between 190 to 200.
About this time, volume buying by funds will increase, small investors will have moved their funds out from companies such as GEEK, SKYMALL, ONSALE, BOOKS-A-MILLION etc. etc. and move into AOL for the long haul (retirement, kids education etc.)
And beyond that, the Netscape merger finalization announcement and the outcome of the DOJ and Microsoft lawsuit. If there is a perception that Microsoft has lost out, then the AOL/Netscape merger will push the stock further up, since that will push AOL in the forefront.
Any takers on my painted scenario
Happy 1999 and happy AOLvesting
Chinmoy |
