SI
SI
discoversearch

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor.  We ask that you disable ad blocking while on Silicon Investor in the best interests of our community.  If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.
Technology Stocks : America On-Line (AOL)
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  
To: Jorge who wrote (4065)1/30/1999 1:17:00 PM
From: Chuzzlewit  Read Replies (1) of 41369
 
Good morning George,

I never cease to be amazed at the knee-jerk reaction people have to analysts' opinions. If the typical SI investor owns a stock that is downgraded by an analyst, the analyst quickly becomes an "anal-ist" or worse; however, if the "anal-ist" upgrades the stock he suddenly finds that he shares the foresight of a Kreskin and the mental ability of an Einstein.

Independent thought is a good thing. Forming your own conclusions based on analysis is a positive good. Unfortunately, many investors in internet issues do not see it that way. They view critical thinking as a form of bashing, and all they want to hear is good news. I am reminded of the contrast between the "adults" and the little boy who cried "the emperor has no clothes".

If I were a true cynic I would note that brokerage houses make the bulk of their money in investment banking, and that investment banking depends on a steady flow of lucrative IPOs.

If you look at my posts you will see that I have repeatedly pointed out that the company appears to be in excellent financial shape and has tremendous growth prospects in front of it. I cannot say the same for the stock. I have repeatedly asked the same question in a number of different ways, but have yet to receive a satisfactory answer. The question is what cash flow do you see in the company's future that justifies the current share price while at the same time providing adequate compensation for the risk taken on by holding these shares? Then I asked a somewhat easier question: suppose AOL were a mature company today. What kind of cash flows would be necessary to support the stock price of $175? Now using that cash flow number, can you imagine what that implies in terms of AOL's current business model. How many subscribers? How much in terms of advertising revenues? What would be the infrastructural requirements?

George, these are not idle questions. These questions probe the issue of whether investor expectations are even possible, without even broaching the question of reasonable.

TTFN,
CTC
Report TOU ViolationShare This Post
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  

HomeMailHotSubjectMarksPeopleMarksKeepersSettings
Terms Of UseContact UsCopyright/IP PolicyPrivacy PolicyAbout UsFAQAdvertise on SI
© 2025 Knight Sac Media.  Data provided by Twelve Data, Alpha Vantage, and CityFALCON News