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Technology Stocks : America On-Line: will it survive ...?
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To: Ramsey Su who wrote (1357)2/1/1997 2:30:00 PM
From: Art Stone   of 13594
 
Looking forward to their quarterly report, due Feb 6 per Zacks. Anyone has an accurate date?

Based on past history, that date sounds about right..

It is entirely possible that the 2nd qtr results will look better than you might expect, but there are some things to know about it.

I'm seeing a growing pattern of people reporting that AOL charged their credit card for $214 for one year prepaid access, when the people claim they did not click on a button to order it. What I'm hearing is that AOL badgers you over and over again to sign up for the prepay. If you happen to click on the wrong button, you're stuck. No confirmation. AOL will not undo the transaction.

Also, the reports are starting to come in (as I expected) of people who didn't realize that the Unlimited time did not start until their December billing anniversary. Many people started going hog-wild on the first, fed by carefully worded news releases, and sloppy journalism which tended to make people think "the billing meter is turned off on Dec 1st". Those folks are now getting their $300 bills for December. That's my guess why AOL's stock has stayed so high.

One important clue to look for:

Another one of AOL's favorite angles has been to report the following month's subscriber gains along with the quarterly earnings. If this was a typical cycle, AOL would report oct-dec '96 earnings and January subscriber gains around the 10th of Febraury. IF AOL does not report January subscriber numbers and instead emphasizes December's gains or "Total sessions" (A meaningless statistic), look out.

Actually, right about now, the healthiest thing AOL could do would be to shed about 4 million members. That kind of mucks up the Cable TV valuation model, though.
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