First, I think that in 5 years AOL will not be able to charge its customers 23 bucks/month to log onto the net. AOL + local telephone service costs $41-42/monthly, while cable modem + a second phone line from T will cost only 45 bucks/monthly, and you get a 20 fold faster connection. Actually, I think that at that time, it will basically be free for customers to log onto the net via the ISP.
Secondly, I don't see AOL getting 170 million customers in 5 years from over the world. It will be lucky that it get half as many as you believe. And I don't think that AOL will make more than 2 bucks in 5 years excluding investment gains.
Thirdly, market cap does matter. The US market is already on the verge of a little bubble and to think that the market will go up several fold in 5 years is really lame. Valuation also does matter. AOL has successfully charged into a new arena by being the first 100 billion company to have a mid-triple digit PE, and probably the only one on earth. Maybe it will, be the only one trillion company on earth to have that kind of valuation.
Finally, as you claim that if this is not a 10 bagger, you won't invest in this issue. This is another lame claim because essentially every 'long' investor will say the same thing when they invest in a certain issue. Heck, if this is such a no brainer, why even Wall Street salesmen and salesladies are not able to move this issue in their direction after setting up lofty target prices? Why the institutional investors are shorting these net issues (sure 10 baggers) like there is no tomorrow? Are they all nuts and having IQ as low as Forrest Gump?
I am holding YHOO! and some other net issues, but my target for price and market cap is more realistic.
good luck,
larry! |
