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

To: steve lipson who wrote (8251)	2/25/1998 11:35:00 AM
From: Bexar	Respond to of 13594

Opened higher... Let the games begin. Would anyone like to get on? Going down...

To: steve lipson who wrote (8251)	2/25/1998 12:09:00 PM
From: Pancho Villa	Respond to of 13594

>>Pancho, you may have missed the forest for the trees.<< Point taken. I will try to keep my eyes open. However, most of what we have seen in the way of the recent price move on AOL is based on especulation [which may indeed be right] of what the future may bring. If insider selling is any indication of perceived fair valuation then the recent almost doubling of the price taking the stock to a 98 earning multiple of around 100 may be a bit overdone. Notice I have not said that AOL is a destined to zero short. I do intend to cover but at much lower prices which I assure you will come. Bad news also happen and markets correct. When this happens high flying puppies with no evidence of past financial performance [like AOL] take a big hit. IMO, AOL is currently overpriced. If I were long I would definitely be taking profits now. If you like the fundamentals, you will have plenty of opportunity to jump back in at lower prices. For the internet business as a whole there is no question about the existance of significant market potential people are still trying to figure out how to best exploit this interactive media [look at Netscape]. IMO the economic side of the ISP business is not that attractive and the viability of significant profits from alternate forms of revenue remains to be proven. It is easy to get a false sense of security when the stock price is up [when it should really be the oposite]. I hope you recognize we are talking about two way risk here. I must admit that there are other shorts in my portfolio for which the upside risk is much lower. Would I have shorted AOL at 74 if Iknew it was going to 120+? of course not! but this is a sunk cost! at 120 IMO it is a fair bet! Thanks for the input. Pancho

To: steve lipson who wrote (8251)	2/25/1998 12:37:00 PM
From: jack rand	Respond to of 13594

>>Why did the Internet's popularity run CompuServe and Prodigy into >>the ground, while not laying a glove on AOL. Actually, it was AOL's gutsy huge gamble to spend on marketing huge sums that others either couldn't or wouldn't match (e.g. the bean counters and H&R Block and at IBM). But, it's a new world again. Mindshare isn't just gained, it must be maintained constantly. As others (e.g. MCI/Yahoo) begin to market more, AOL at the least will be compelled to ratchet up marketing expense that it only recently has gotten under control. And it's worth noting that MSFT spent very little on marketing of MSN, instead betting at least $2 billion so far that digital TV is the true mass market future.

To: steve lipson who wrote (8251)	2/25/1998 1:59:00 PM
From: Eric Klein	Read Replies (1) \| Respond to of 13594

Steve, The intrinsic value of a company comes from it's earnings. AOL has never really made money. They might show a positive quarter here and there, but they usually later restate results to show a loss. Right now they're selling for a P/E > 500. All the arguments in the world about the franchise value of AOL don't mean a thing unless they can sometime, somehow make money. This is a bubble, pure and simple. The question is not whether it will burst, merely when. I think that all the shorters of this stock would love to have been long this stock for the last year. So if you've been long, Congratulations! I hope your judgement is as good on when to get out of AOL.