Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : AUTOHOME, Inc -- Ignore unavailable to you. Want to Upgrade?

To: JayPC who wrote (18878)	1/16/2000 12:20:00 PM
From: E. Davies	Read Replies (1) \| Respond to of 29970

In 3 years AOL/TWX will announce a tracking stock "to fully exploit the value of it's internet properties In 3 years internet properties won't be given a special premium, except for the fact they will likely still be respectable growth stocks. Yahoo will be growing @25% and earning (wild guess) $3-$5/share. Will that justify the $1000 price everyone is expecting? AOL was in the same position. In a way it is good that ATHM is "undervalued", because the time will come when actual earnings potential is what counts and ATHM will be more stable. It could easily take 2-3 years for this to happen, but it will happen. Eric

To: JayPC who wrote (18878)	1/16/2000 3:12:00 PM
From: GraceZ	Respond to of 29970

Is AOL's market cap justified now? Try valuing AOL/TWX on a media stock P/E basis. In 3 years AOL/TWX will announce a tracking stock "to fully exploit the value of it's internet properties" Armstrong doesn't think so either.... you can almost hear him chuckling as he says this. Well, I think there's going to be a convergence here. The market today has been operating with disparate valuations, which is a statement of the obvious. Dot-com companies have incredible multiples that one can't even begin to apply to more traditional companies. AOL built a huge market capitalization based upon the Internet portal-type valuations the market was willing to afford it. And it went out and bought what I would call a traditional content company, a very strong and a very high-quality company. But its market valuation was predicated on a much different set of metrics. Now that they're one, the AOL Internet-space kind of metrics are not going to prevail. And in fact the AOL growth rate, which was 30 to 40 percent in the combined company, I heard them announce, is now going to be 12 to 14 percent. Well, that's not far off of AT&T's growth rate. Next year we're going to grow 8 to 9 percent. And if you looked at our business minus the consumer business, we'd be probably growing at the same rate they are. And so this may be the beginning of reality in terms of the convergence of the disparate values. In other words, start your short position on AOL now.