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Technology Stocks : America On-Line (AOL)
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To: Vendit™ who wrote (4039)1/30/1999 4:47:00 PM
From: Reginald Middleton  Read Replies (1) of 41369
 
Earnings are not nearly accurate enough a proxy for market value to use as a method of predicting AOL's share price. I think this is especially true in AOL's case. See the link that I provided to Chuzzlewit.

AOL capitalized (appropriately IMO) marketing expenses a few years ago, and then were forced to restated earnings with those investments expensed instead of capitalized. Notice the difference. These discretionary moves are highly variable and cause significant fluctations in earnings, fluctuations that definitely are not reflected in the valuation of the company.
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