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Pastimes : Clown-Free Zone... sorry, no clowns allowed -- Ignore unavailable to you. Want to Upgrade?

To: sun-tzu who wrote (146636)	1/28/2002 6:56:21 PM
From: reaper	Read Replies (1) \| Respond to of 436258

I know you didn't ask me, but.... AOL/TWX looks like they'll do +/- $5.5 billion in cash from operations this year (I don't know how this does or doesn't compare to EBITDA; EBITDA is a made up number and what I care about is cash). Now, they spend a solid $3.0 billion a year on capex, and a lot of that capex is necessary to maintain / grow the cash from operations (i.e. its for stuff like upgrading the cable network, without which they'd lose customers). So they do say +/- $2.5 billion free cash a year, growing at maybe 10-15% a year. In the sort of interest rate environment we're in, you could get me to pay upwards of 30x that cash flow if I believed the competitive position was sound. That would be a +/- $75 billion equity market cap. Or still down roughly 40% from here. Note: this is from somebody who suffered as a TWX long from 1991 until 1998 or so; a VERY long but ultimately lucrative trip. Cheers