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

To: Pancho Villa who wrote (8608)	3/6/1998 7:43:00 PM
From: rhet0ric	Read Replies (2) \| Respond to of 13594

AOL is my prime short target right now. Don't worry Hawk, peacelover, Bald Man--this stock will go down. It's just a matter of time. So don't watch it day by day. Have patience. My view is that it's running on hype, and the only thing that will bring it down is a string of bad news, or one really terrible announcement. So, what bad news could they have? Two things: lower than expected revenue, and a stall/decline in subscribers. The two of course are related, though not completely. So let's look at what could cause those things: 1) Higher than expected costs of upgrading equipment 2) High defections to cheaper ISPs 3) Decrease in new subscriptions 4) Development of new Internet (TCP/IP) technologies that make AOL obsolete 1 is kind of stabilizing right now, because they have already upgraded to 56k. So until a new standard like ADSL or cable arrives, we're not likely to see that any time soon. 4 will happen eventually. Things like Internet telephony, increased business usage, and security concerns (AOL requires proxy servers, which can't authenticate properly) will ultimately undo AOL completely. But this is a ways off, like at least a year. 2 and 3 are happening right now because of the rate hike. This, to me, is AOL's real point of vulnerability. In some ways, though, the rate hike improves their situation, because it raises revenue and lowers the load on their modem pools, etc. In the long run, though, AOL can only increase revenue by increasing market share. MCI and others are already aiming their guns at AOL. Even here, though, the results will not show for awhile, possibly not until next quarter's announcements. In sum, if you want to make money shorting AOL, you have to be very patient. I may jump in after the split. When I cover is completely dependent on when 1-4 above kick in, which may not happen for 6 months or more. my 2 cents, rhet0ric

To: Pancho Villa who wrote (8608)	3/6/1998 10:16:00 PM
From: Bald Man from Mars	Read Replies (1) \| Respond to of 13594

<<So why do I do it? It is fun to try and beat the market, make some extra money without having to shovel... I like the stuff but I must admit I miss on other things. (I don't shovel but put over 60 hours/week on it any ways!)>> I agree with you wholeheartedly: Every day the market opens, there is a chance that we can experience: The thrill of victory, and the agony of defeat ... That is what makes life worth living, I think I am addicted ...