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

To: IKM who wrote (5503)	11/6/1997 3:43:00 PM
From: Brent D. Beal	Read Replies (1) \| Respond to of 13594

I agree. Why does everyone think that AOL is so well-positioned to rake in so much money? Sometimes I think that people are just flat-out idiotic in their analysis of AOL. Isn't it obvious that AOL's principal attractiveness to technical neophytes is as a convenient and simple ramp to the internet? Once people figure out that they can get to internet without all the shit that AOL makes them look at (layers and layers of ads that you have to click through, etc.), e-mail blackouts, poor service, busy signals, etc., they leave. The only reason that AOL is still around is inertia and large supply of neophytes--some people just don't want to change their e-mail address etc. All in all, things are pretty good right now for AOL and they're still not making any money. What's going to happen in a couple of years when AOL is going to have to compete with other forms of internet access that will be ad-free, faster, and nearly as cheap? This is not pie-in-the-sky bearish sentiment, this is a reality. There's cable, satellite, etc. and they're coming fast, not to mention your local phone company. So when, exactly is AOL going to start to deserve its forward P/E of 200+? In may opinion, and in yours, I'm sure, it's not the earning that are going to go up, it's the stock price that is going to come down. I could possibly stomach a P/E of 60 or 70 for this stock, hell, I might even buy it with a P/E of 40 or 50, but that implies a price of around $30. Best of luck on your puts. I own a few also.