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

To: Rascal who wrote (33803)	11/7/1999 11:21:00 AM
From: Pruguy	Read Replies (1) \| Respond to of 41369

I'm not sure what the market cap is today but if you say it is 150bb and they have 20mm subs, the market is valuing current customers at 7500 each.. You can't really look at it this way though since the number of subs is still growing and the potential number is hard to guess. This is a method used in cable companies, but they have a limited number of potential subs and the growth rate of their subscriber base is highly predictable.. Trying to place a value on AOL per subscriber is really a method of analysis I think is full of unknowns and therfor not a very good method. The most widely used method because it has proven to be the most predictable and quantifiable is cash flow...Analysts try to predict future cash flow and using a discounting method place a target multiple to cash flow on the company. This is used for a lot of the nets.....Actually, only the media places cable cpompanies with a value per sub... The market looks at these the same way as the net but place a much higher growth rate to AOL than they would for the Cables. There are many reasons why the multiple of cash flow should be higher for AOL than ATHM,Comcast HSAC etc