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Technology Stocks : America On-Line (AOL) -- Ignore unavailable to you. Want to Upgrade?

To: ChinuSFO who wrote (21511)	6/11/1999 7:50:00 PM
From: Frank Ellis Morris	Read Replies (3) \| Respond to of 41369

Chinmoy, Aol is a bit stronger home then it is in Europe. Recently Dell announced that it would offer free access in Europe. Europeans are charged per minute via telephone. If AOL were to offer this free access it would create a bit of unpopularity with subscribers here in the US. Going forward AOL faces many uphill challenges from the cable industry which can offer better bandwith access. I am going to share with you some comments that were made to me regarding anothers views on AOL which are similar to mine. Please read the following: "AOL's PE is still more than 300 after the little beating it took today (trailing earnings at meager 33 cents, investment income does not count). Every sophisticated investor knows that AOL is a high risk investment with the exception of, the likes of Blodgett and Meeker, and those who still have the issue targeting at 200-265. It won't drop to 70s in the very near term. Issue is going to make lower low and lower high and die in a gradual manner. ACtually the day tha the issue drops 15 points will arguably mark an intermediate bottom for the market. I was very troubled by the easly double penetration of resistance AOL had today. I know that 105 level was to be penetrated, but the 100 level, I thought it was for next Monday. Anyway, from this point on, every 5 point drop will bring in a sucker rally until 80-90, which is really dense area. More bad news + higher rates should really send the issue free fall. DELL at low 30s is a good long term buy. Issue has solid management team and solid fundamentals. unlike nuts, issue has less hype and make much more money. In this kind of investment environment, earning talks. On the other hand, AOL seems to have 9 lives just like cats. It was 'dead' years ago and then made the dramatica bounce back. It was about the penetrate 106 level last Friday, yet came the Portland judgement which resulted in a fierce sucker rally toward 120. My point is, AOL is vastly overvalued and is worth, probably 50-60". I do not think at this time the glass is yet half empty but will be soon. The risk now is immense. Why should anyone rush out to buy a stock which was high as 175 and now is under 100? If this was such a great company would you not think that there would have been bargain hunters at 150 or that AOL would be a screaming buy at 140? This stock my friend has been seriouly wounded and many investors have been burnt big time. The time for caution is not at hand. You have only begun to see the carnage in AOL. There is (imho) much more to come. Maybe not next week or the week after but over the next couple of months. Best Wishes Frank