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: Curtis Philips who wrote (1315)	1/30/1997 10:43:00 AM
From: Joel Sternberg	of 13594

>The big money guys will try to prop up the value for a while so they can liquidate their positions, then they'll let it tumble.< I am not so sure you are right on this. At some point, AOL is going to have to go to the public markets for more money. That point is probably sooner vs. later, especially if customers demand the cash refunds. To make the next offering truly successful, and thus endear themselves to the corporate community, the AOL underwriting syndicate has to keep the price of the stock up. A stock offering at $35 brings in a heck of a lot more money than one at $20. Sorry for making this comparison again, but just look at the performance of Netscape around the time of their secondary offering. The syndicate could not say enough good things about them. Now, one of their principal underwriters, Morgan Stanley, has finally cut them to a hold. Just remember this principal of the financial markets: The financial markets are set up to enrich in this order 1) the financial community itself--underwriters/brokers and dealers 2) corporate insiders 3)investors. Therefore, do not put it past the financial community to do anything which serves 1 and 2, even at the expense of 3.

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