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Technology Stocks : America On-Line: will it survive ...?
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To: gerardo nurse who wrote (1292)1/29/1997 9:57:00 PM
From: Johnathan R. Bowden   of 13594
 
I too am dumbfounded by AOL's resiliency. The best way to look at this is the traffic light analogy. When the light is green, everyone proceedes at a normal pace. When it turns yellow, people speed up to get through.... but at some point the light turns red. maybe a car or two gets through... then CRASH! I think you get the idea. Patience my freind. I'm short 300, and if it goes up some more, I'll short more. AOL hasn't made money before, and this deal certainly won't help.

BTW:
While AOL does not admit "wrongdoing," it did agree to make it
easier for members to cancel their service; to hold its
membership level to 8 million for the time being; and to halt its
ad campaign for at least the month of February.

The agreement comes after more than a week of intensive
negotiations with at least 20 attorneys general; several more
jumped onto the agreement at the last minute. AOL was under
public threat of a lawsuit from New York for alleged violations
of local consumer protection laws. The attorney general for the
state of New York had told the company it had until Thursday to
respond or it would face a lawsuit.

More than a dozen AOL members also have filed class-action
suits against the company, calling for refunds. It was unclear as
to how this settlement would affect these suits.

But one thing is clear: The agreement will surely hit AOL in the
pocketbook. How hard will become evident next month when
AOL reports its earnings.

For today at least, the agreement seemed to help AOL's stock.
AOL's stock was up 5.67 percent today to 37-1/4. But in the
longer term, the financial impact of today's deal is still not clear.

The company will not automatically distribute refunds to
everbody. Instead, AOL members will have 120 days to file for
refunds or credit, according to a complicated list of rules
formalized today.

This is from news.com, and I think it is wise to realise that the financial impact of this "good news" will be negative to AOL's bottom line.

Regards, John
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