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Technology Stocks : America On-Line: will it survive ...? -- Ignore unavailable to you. Want to Upgrade?

To: Sam who wrote (5171)	10/23/1997 9:01:00 AM
From: John Kratus	Respond to of 13594

Sam, I certainly agree with your statement, "Don't fight the tape." I was short AOL six times earlier this year, and each time I made money. This time, I haven't been so fortunate...yet. The mistake I made this time was in thinking that nobody could POSSIBLY want to pay this much for a company with no earnings and an unproven business plan. Obviously, somebody does. Even with my recent AOL losses, my investments are ahead by 80% in 1997, so I'm not too shabby of a stock picker. (You can choose to believe this or not, but it's true.) My experience and gut tell me that this current run is nearing an end. My prediction for AOL's current quarter: Management will present a good news/bad news report. The good news will be that subscriptions are up (nobody audits these figures anyway) and that AOL stock will split 2-1, indicating management's faith in the future. The bad news will be that earnings remain elusive or that previous earnings have to be restated. Analysts will herald the report as great news and will try to pump the stock one more time. But WS's institutional clients, who hold most of AOL's stock, will be edging toward the exits, because they want to nail down 1997 gains, and they know that the Compuserve merger will not be accretive for years. Beginning in mid-November, the long slide will begin. What will happen to AOL from now until then is anybody's guess. John