refunds to some 10 or so percent of 6,000,000 people. Is this their current membership level?
Might be, but I don't think it's quite that low yet. I'd guess it at more like 6.5 or 7 million. However, I expect that 10% to be quite low. I think a good 67% of subscribers have been unable to get in, based on their 31:1 ratio compared to a usable 10:1 ratio. Many will just move on without pursuing refunds, but I don't think that'll be 80% of the effected people. Might be, though. In any event, I would expect that most of the affected people who don't request refunds will have moved on to another ISP.
Keep in mind that unlimited-access subscribers comprise 80% of all of their subscribers since the last time they reported on it. Brings us to 6.4 million u/a subscribers.
I wonder if the 8 mil they say they have includes those of us who get multiple free accounts, never to move to a paid account. I don't do this anymore, but used to. I ran a large BBS and bought modems like candy for a while, and each modem would always come with a free month of AOL, which I would either use for myself or give to friends who might use them.
I can see your point regarding whether or not they "owe it to the public" to tell us membership numbers, but don't know if AOL really does. Granted, they're always going to tell us when the number is going up, but I don't expect they will when it's going down.
Related points/questions:
1. I recall seeing in one of the news releases that a lot of the increased subscriber revenue was due to the number of folks who paid 1 or 2 years in advance. I can't find this number again. Anyone know what percentage of 2Q revenues came from this? Reason I bring this up is: I think these charges are mostly likely just showing up on people's credit card bills and think there's a strong chance they're going to end up in chargebacks.
2. Related to #1. I would assume credit card transactions to be considered cash or equivalents as opposed to AR items. True? I expect 25% of credit card transactions for the quarter (assuming most of these and the largest amounts were done in December) to result in chargebacks.
3. Is it just me or does this company have nowhere near the kind of cash available it'll take to complete the buildout? It looks to me like they can barely cover the AP they had at the end of December. And that's if their cash and AR were used for nothing but taking care of AP. How're they going to get the money for continued operations?
To those who've addressed questions to me, I'm not ignoring you. I just don't know the answers. I don't know who IPO'd the company or much of the financial background. My bearish sentiment on this company is based primarily on my belief that the worst news is yet to come (fraud convictions or settlements because they had to know the 31:1 ratio meant 2/3rds of their users would be paying for a service they couldn't possibly get into). |
