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

To: Apache Indian who wrote (9760)	5/5/1998 3:50:00 PM
From: Keith A Walker	Read Replies (3) \| Respond to of 13594

I have no clue if it will go to 73, but I am short and do have puts. I believe the hype for these stocks will end on Thursday. Although, I have been way wrong before, and undoubtedly will be wrong again. I am just placing a bet that there is more downside for AOL than upside at this point. A P/E of 700+ just means that they will need to show growth of around 800% to justify their current valuation. I do not think this is in the cards for their earnings. Even if earnings were $0.24, 100% better than street estimates, you are still looking at a 300+ P/E. Even Iomega backed off from those levels after it surpassed $52 in spring of 1996. It was amazing to hear people say Iomega would hit 150 or even 200 with unabashed confidence. The parallels between Iomega in 1996 and where AOL is today, albeit, without the comparative institutional interest is just amazing to me. If the institutions get spooked in the least by AOL's earnings or the market takes a hit, then look out below. For what it is worth, hedging here is probably your best bet. Regards.