Chuzz...As per your suggestion I'm taking my last post from the other AOL board over here to throw out to the group here...I'll copy my post from the other board but basically, for the rest here, I'll summarize my thoughts by saying this: Do we know enough about where AOL is going with their acquisitions/partnerships and subsequent development, furthering current endeavors and brand new ones yet to be entered into, to be able to intelligently discuss whether AOL is overvalued or undervalued?...As I ask/suggest in the below re-post it COULD BE that AOL is Undervalued.
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To: +Chuzzlewit (4086 )
From: +Jorge Sunday, Jan 31 1999 11:00PM ET
Reply # of 4174
Chuzz...You are asking for the exact details of AOL's future to be understood right now...Yes, we know about subscribers...Yes, we know what kinds of advertising revenues have already come in and have some projections for the industry's future advertising and revenue sharing prospects...And there are other projections too I believe that can define where AOL has been, and more importantly is going, with their income/profit margins, etc going forward...
However, to narrow our understanding down to only what we have seen, and are using currently as our projections for AOL's future, may not, and I stress-may not, be enough.....It IS possible that with AOL's acquisitions, especially with NSCP, and it's partnerships and brand strength, and the huge untapped future Internet potential in general there are whole new areas of growth that may be so expansive that----are you ready? Here it comes. Brace yourself:-----AOL may turn out to be UNDERVALUED at today's price, or to put it another way, AOL may grow into it's P/E.
May is the operating word...and as I said before, I'm not sure I would go out and bet the farm on AOL, but I sure think it's worth betting a piece anyway..A piece the size that someone feels comfortable with.
Also, the way I personally look at it is even if AOL has some major correction somewhere along the way and I have to sell at a considerable distance from it's apex I still will have made so much money I won't feel badly at all...Even if AOL lost 70% of it's value at current prices I still will have made more money in AOL than any other stocks I own, and I own some good ones...
So for me investing in AOL is not a risk and is certainly worth staying with the ship for awhile.
As far as trying to make sense out of the valuation, I don't even try....What I'm focused on is their business model and whether they are growing their earnings from Q to Q, Y to Y, and have solid projections.
Regards, George
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