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

To: Gold Beach who wrote (32172)	10/3/1999 6:04:00 PM
From: puborectalis	Read Replies (1) \| Respond to of 41369

AOL remains a core holding...all the bad news has been digested. Net Madness: Holiday Basket Update October 4, 1999 We have analyzed the stock price performance of ML internet analyst Henry Blodget's "holiday basket" through October 1, 1999. We are using opening prices on August 18, 1999 as the starting point of our calculations because we believe that analyzing event-driven performance based on the opening price is more reflective of real world performance. We have ignored commission costs. See the table below. The average return of the basket jumped to 18.2% vs. 9.9% last week. Buy-rated performance increased due to a continued rebound in AOL and a major move in AMZN while Accumulate-rated performance rebounded due to strength in ATHM and ETYS. YHOO was down for the week. Earnings are due Oct. 6. ATHM gained on deal speculation. ETYS moved sharply higher on a Goldman upgrade and price target boost. AMZN and ETYS are ranked 2 and 1 in terms of performance and not surprisingly 7 and 8 in terms of upside potential. Both are seriously in downgrade territory. BNBN, INKT, and LCOS qualify for upgrades based on > 20% upside potential. BNBN and LCOS have qualified for upgrades during the whole existence of the basket. INKT has flirted with upgrade and downgrade territory. This week it is in upgrade territory. We note that Blodget's comments in a recent LA Times article have generated a flood of message board traffic and seem, in part, to contradict some of his recent research actions. Anticipated Research Actions (Holiday Basket) Barring significant pre-announcements, we still do not expect the analyst to alter his ratings or price targets until after these stocks report earnings. However, given the analyst's latest comments in the LA Times, we believe the analyst may need to clarify his position on these stocks. In the interim, we believe that the analyst's ratings and the upside potentials suggested by his target prices should be treated as mutually exclusive. YHOO is scheduled to report on October 6. If the stock closes above $187.50 on that date, we would expect the analyst to address his $225 price target because YHOO would no longer meet the 20% upside requirement for a Buy rating. We do not foresee a ratings downgrade unless YHOO reports disappointing earnings or expresses concerns about its outlook. However, we believe that any downgrade effected on the basis of valuation concerns could raise serious doubts about the validity of the ratings on his other stocks. AOL would require similar attention above $125. Unless AMZN sells off significantly, its price target will need some serious attention. In reality, it needs attention right now. Based on the current price of $77 1/4, an acceptable target would be $93. By the way, AMZN was still officially "overvalued" the last time we checked. Similarly, ETYS needs serious price target attention right now. Blodget missed an opportunity to upgrade the stock, but Goldman didn't. Blodget is the only major analyst we know of recommending purchase while having an official price target that represents significant downside from current levels. Ironically, the Accumulate rating may now work in Blodget's favor because it will allow him more flexibility to avoid a ratings downgrade. Based on the current price of $65.50, a target of $73 would buy Blodget some time. If ETYS were Buy-rated he would need $79. Similarly, INKT may gain some advantage with its Accumulate rating. Although it shares the same $150 price target as AOL, it does not enter downgrade territory until it moves above $137.50 versus $125 for Buy-rated AOL. INKT is currently in upgrade territory, but the analyst hasn't shown an inclination to upgrade the stock. When we get a clearer understanding of "fantastically expensive", we'll reassess the likelihood of an upgrade. Based on upside potential, both BNBN and LCOS should be Buy-rated, but, so far, the analyst hasn't acted. With AMZN moving further away from the book business, we'd say that Blodget has room to justify an upgrade by citing BNBN as the premier book play. Unfortunately for LCOS, Blodget isn't rating it relative to its peer (YHOO) based on upside potential which it still has plenty of based on Blodget's target. Deal speculation surrounds ATHM. We don't expect any upgrades, but are looking forward to seeing what Blodget does if ATHM moves into downgrade territory which is less than $1 away. Will ATHM be yet another example highlighting the eccentricity of Blodget's ratings and price targets?

To: Gold Beach who wrote (32172)	10/3/1999 6:53:00 PM
From: puborectalis	Respond to of 41369

Evolutionary not revolutionary.......AOL's new upgrade not so revolutionary by Chris Cobbs Orlando Sentinel If you're the type who welcomes a free bar of soap or box of cereal with the Sunday paper, get ready for the new version of America Online arriving this fall in a magazine near you. America Online, Version 5, is an evolutionary, rather than revolutionary, upgrade. The changes are not as dramatic as they were in the upgrade from version 3 to 4 last September. At that time, the program's appearance underwent a much-needed face lift. AOL has built a mass audience by being easy to use, graphically pleasing and well-rounded. After reviewing a preview copy of the new version, I believe those characteristics are enhanced. Most users will find two or three features to justify the upgrade process. Besides, the new software is free and easy to install. Fifteen minutes after placing the CD-ROM in the drive, I was signed on. Two additions - "You've Got Pictures" and "My Calendar" - are likely to help AOL expand its subscriber base. Orlando was a test market for "You've Got Pictures," which makes it easy to send pictures over the Internet. "My Calendar" strikes a balance between the low-tech types with calendars on the refrigerator and the Palm Pilot set, with organizers on their belt. The colorful calendar can be viewed by day, week or month. It displays appointments, birthdays and anniversaries. A nice touch is the ability to find community events online. Another feature touted by AOL is the "Search" function, which allows a user to simultaneously search AOL content and the Web. The main search screen is a listing of broad categories, with more detailed listings below. AOL's desire to protect users from pornography surfaces when the search feature is used. For instance, when I clicked on "computers/Internet," I received a message that said, "Some of the following results are from the World Wide Web and may contain objectionable material that AOL does not endorse." Cosmetically, the Welcome screen has been altered subtly. The overall effect is more pleasing and less cluttered. The "Today on AOL" lineup has been graphically modified to make it easier to determine where to click for links. Down the left-hand side of the screen, you'll find "You've Got Mail" (replacing Mailbox), "You've Got Pictures" (new), "My Calendar" (new) and "Chat" (formerly People Connection). For those fortunate enough to have high-speed Internet access, AOL 5 will support cable modems, digital subscriber lines, satellites and T1 access. The high-speed-access feature is still in testing but is expected to be available later in the fall. Broadband access, which is always "on" and eliminates the need for a dial-up connection, will bring richer content featuring video, audio and games. Even if you don't feel like upgrading to version 5, you can always find a use for those CD-ROM mail-outs. They make nice coasters.