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Technology Stocks : America On-Line (AOL)

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To: M. Robins who wrote (8733)3/31/1999 12:12:00 PM
From: Smart Investor  Read Replies (5) of 41369
 
We will see. I am not using AOL, and most of my friend are not using AOL because they can get it cheaper and faster from somebody else. ISP is a highly competitive commodity kind of service, and there is no lock for customers.

If your claim of generating money like crazy is true in the next 5 years, why a projection of revenue growth for only about 50% or less for the next 5 years? If you assume AO's stock price stays at today's level in 5 years, its PE will still be more than 100 after five years of compounded earning growth of 50%. With more competition coming in from all directions, the margin will go down and growth rate will slow, and this stock will eventually run out of gas.
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