Rocketman,
You state, To tank, the majority of these institutions would have to decide that their analysts had made a mistake, and sell significant blocks of AOL. Ain't so. Stocks trade at the margin and frequently tank on thin volume. Indeed, yesterday on CNBC I heard their reporter on the NYSE floor comment that much of the tech stock selling that drove prices down was averaging under 1000 shares per trade, individuals not institutions. To state the obvious (the very obvious), it isn't owning a stock that moves the price, it's buying or selling it.
For Internet stocks in general to go down and AOL in particular to go down, you say, Furthermore, investors must lose faith in the future of the internet. It seems to me it happens the other way around. A stock goes up, everybody gets positive on its prospects. It goes down and ex post facto people find reasons to justify the downdraft. And that's especially true with stock as difficult to value as Internet stocks.
Best,
--Steve |
