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

To: vegetarian who wrote (5828)	11/12/1997 11:39:00 AM
From: steve lipson	Read Replies (2) \| Respond to of 13594

I don't believe we know from this if the notes were sold at par, so the conversion price and interest rates might be closer to market terms than the announcement indicates. On the other hand, we can also speculate about whether some or all of the buyers of this private placement are either involved in, or privvy to information about, some pending transaction that makes them quite comfortable projecting AOL's stock past 100.

To: vegetarian who wrote (5828)	11/12/1997 11:43:00 AM
From: PAL	Read Replies (1) \| Respond to of 13594

The issuance of subordinated convertible debentures of # 350M due in 5 years shows that AOL is in financial bind: 1. working capital is big negative to the tune of $ 183M 2. Interest for the debentures will run $ 14M/ year 3. If there is no conversion by the note holders (getting a measly 4%), the AOL has to set aside $ 70M every year to pay off the debentures. At that time AOL might float more notes to pay previously issued. Just like The US government (without the safety of treasury bonds). 4. Woking with Sony to give 50 hrs of free AOL connection on every music CD Sony issues. Yet no mentioned how much AOL will have to pay Sony. It is unlikely Sony is paying AOL since in that case (no pun intended) AOL will trumpet the revenues that can be heard in Mongolia. Brian Oakes, what is your spin? Still reiterate AOL as the good buys?