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

To: Skeeter Bug who wrote (5615)	11/7/1997 2:41:00 AM
From: Warren Gates	Read Replies (1) \| Respond to of 13594

The bottom line is AOL is an overvalued stock. At $.16 it is trading at an annualized PE of 125 ... but it didn't really matter when AOL was not earning anything because momentum was enough to carry it upwards ... Tomorrow, the momentum money is heading out the door. This leaves only the TA and fundamental money in. Because of technicals, we might see some support at $70. Also the heavy short position will provide some cushion. Then this money leaves too as the stock retraces, probably even going short. When only fundamental money is left in AOL, then we begin the long and winding trek down to where fundamentalists will see a good value, perhaps at an annualized PE of 50. This implies a stock price of $32.