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: Harry Larson who wrote (6865)	1/16/1998 12:08:00 PM
From: yard_man	Read Replies (1) \| Respond to of 13594

Kind of what I've been thinking. I say it tanks promptly after earnings or the split announcement.

To: Harry Larson who wrote (6865)	1/16/1998 12:52:00 PM
From: Steve Robinett	Read Replies (1) \| Respond to of 13594

Harry, My 52-3/8 guess was a joke, sort of. I do think AOL would like to see the share price high enough to entice conversion and get rid of some balance sheet debt. But you're probably right it takes a bit more that just barely above the conversion price to entice them. On your second point, whether the split has been discounted, we've all seen stocks run up ahead of the actual split date even though the split has been known for a month. I anticipate that will happen with AOL. After all, from an economic point of view, there is really nothing to "discount" with a split. Unlike, say, an earnings increase, a split just gives holders more shares at a lower price and economically speaking doesn't change valuation. In other words, because there are a lot of people who believe that stocks split then run up again, they often do run up a bit at the split because those people buy, though academic studies indicate splits overall are more likely to occur near highs than lows. I still say we're looking at $100+ over the next few weeks, both due to earnings and the "split mania." Best -Steve