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

To: Glenn D. Rudolph who wrote (9331)	4/5/1998 5:22:00 AM
From: Alper H.YUKSEL	Read Replies (1) \| Respond to of 13594

To the thread : For those who believe that a market downturn has to happen for AOL to go Titanic's way, the below article from Barron's might be of interest. Sorry, if this was posted before. April 2, 1998 by Vito J.Racanelli INSIDER SELLING FLASHES A YELLOW LIGHT FOR STOCKS . . ... But while the fundamentals look solid (except for slower earnings growth), a new concern has emerged -- insider selling. Since February, many officials in a wide range of industries, have used the market's strength to reduce their holdings of their own companies' stock. And people who watch these trends say the selling has intensified beyond what's considered normal, suggesting corporate officials are selling because they don't see much room for further stock appreciation. Bob Gabele, whose CDA/Investnet research firm closely tracks insider activity, says 'The February data shows rapid deterioration in our Sell/Buy ratio.' Normally insiders sell roughly twice as many shares of stock as they buy, but as of early March that ratio suddenly jumped to 3.1 to 1 in favor of sales, he notes. Gabele points out that widespread insider selling began last August and slowed down after the October selloff only to resume in February. Richard Cuneo, editor of Vickers Weekly Insider Report, agrees, adding that 'very positive insider buying signals we had been getting since the October 27th coorection turned on a dime in February.' The Vickers sell/buy ratio is currently around 3.6 to 1. And Cuneo finds the timing of the sales particularly troublesome, coming so close to the time companies report quarterly earnings. 'I never like to see this kind of selling activity heading into an earnings period,' he says. To Cuneo, the selling indicates insiders are worried that investors will pillory their companies' stocks if first-quarter earnings are anything but stellar. He believes the next month or two could be a rocky time as those reports filter in. .... . . . The article continues that while insider selling does not necessarily mean a downturn in the market is to come, it is a weakness sign. The final quote of the article was : 'But corporate executives -- the people who know their businesses best -- have begun to take some of their chips off the table and bank some of the huge profits they've made from their stocks' historic run. Should other investors begin to do the same ?' Full disclosure : I shorted AOL at 64 post-split ! Regards Alper

To: Glenn D. Rudolph who wrote (9331)	4/6/1998 9:54:00 AM
From: yard_man	Read Replies (2) \| Respond to of 13594

>>I feel the price of AOL stock is ahead of itself but it appears possible the fundamentals may soon exist to support this price. The subscirption revenue by the users seems as though that will not be an event of significance in the long run. Any thoughts from anyone?<< An exclusive deal with a bookseller will not be enough. I don't think fundamentals will catch up to the stock price, but it may take a market decline to reprice the stock. In retrospect, I bought puts too early, but am willing to ride them at least untill May when they expire -- don't know if this helps. I think the stock price is walking a tightrope at this point. Lose subscribers and it gets killed. Increased users or per capita usage and AOL's costs will increase faster than proportionately, creating service issues that will kill the stock. It's a delicate balancing act. Advertising revenues must grow at a phenomenal rate for this balancing act to continue, IMO.