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Technology Stocks : America On-Line: will it survive ...?
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To: chenys who wrote (1597)2/8/1997 11:07:00 AM
From: Thom Taylor   of 13594
 
According to Short On Value news letters that is suppose to be
the "bible" of shorting news letters they say a 30% drop from
the 37.25 level.

Looking at a chart their last bottom several months ago was $22.

AOL's return on equity is -794% and brokers that were talking them up
a month ago are now beginning to change their minds.

By the time they get their new modems they will only be able to handle
5% of the subscribers if they were all on at once. In addition to that
they will be slow modems compared to the newer and faster out there.

When PO'ed AOL subscribers try CSRV or just the local internet service
they will see the very great difference in service and stay with
the new company. Also there are 3 new FREE e-mail services that
people are discovering which will also hurt AOL.

Will it drop 30% in a month, maybe. Friday on a good DOW up day
it lost 5%. A 1% drop average a day would still be 30% in 30 trading
days. If you are very conservative 30% in 60 days that's only a
half percent. I will bet and am betting by buying put options for
April. I think April 25 Put options are a mere $38 a contract.

I think AOL is headed to the 25-22 level before it consolidates.
Depending on market conditions it could go even lower after that
target.

To me AOL is a buggy whip company. It is destine to be a commodity
and an out dated technology because of the improved internet content,
web pages, and inter active web pages, free e-mail, free internet access
and things we haven't dreamed of yet.

Hope this helps.

TT

P.S. Betting a month's salary on it does that mean you are bullish
on AOL or Bearish.
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