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

To: rhet0ric who wrote (9208)	4/1/1998 4:07:00 PM
From: yard_man	Read Replies (2) \| Respond to of 13594

You're right, of course. I think there are cracks in the PR beginning to show. There are a couple of items that lead me to believe that these will be come apparent sooner rather than later. That's why I thought it only had only a little farther to run. Buyers have taken the news of price increases from other ISPs as bullish for AOL. Clearly, it is not. It is confirmation of what Case said about AOL's increase not adding to the bottom line. Everybody has said Case's sale of stock is irrelevant and he has been the hypester extraordinare -- I trust he sold what he could without precipitating a decline. These two items tell me that it is late in the game. But what does experience teach you? When will such adjectives be applied to AOL? I'll tell you when. After the stock is already 40 - 50% off its high. You will not be able to profit nearly as much from the fall by the time such adjectives are being used. You have to be willing to spread your bets and endure some pain to win really big.

To: rhet0ric who wrote (9208)	4/1/1998 4:11:00 PM
From: The Duke	Read Replies (1) \| Respond to of 13594

I just did some quick math based on some figures i got from zachs. According to them, the mean analyst projection for F99 earnings is 84c, and the mean five year groth rate projection is 46%. Ignoring for the moment that these projections are increadibly optimistic, i did some math with these figures. They project that F04 earnings will be 5.57. so the stock is selling for 13 times projected earnings for F04. Using a 5.5% risk free rate, the present value of 5.57 in '04 is 3.83, so the stock is at 19 times the present value of those earnings. In other words, to buy this stock (as a company, not a tulip) you have to believe not only that the company will make 5.57 in 2004, but that it will still be growing at that point by more than 25% a year. That's just for the stock to hold its value, not for it to appreciate. Incidently, if the earning are proportional to subsribers from F99 on, then 46% growth until 2004 will project 170M subs. I cant wait, sign me up.