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

To: Raymond who wrote (9895)5/7/1998 7:12:00 AM
From: J.S.  Read Replies (1) | Respond to of 13594
 
Raymond,

You write "if you
have a problem with the "Deferred Network Services Credit", then what about
"deferred revenue"?"

AOL is trading at these prices based on future growth not on present
income (< 50 cents/share annually for a near 100 stock). Deferred
revenues or credits are not the issue. The extraordinary nature
of this item is. As I understand this is due to the WCOM/CSRV deal
and is only temporary.

The biggest issue seems to be that decreased advertising costs were
a big factor in the earnings this Q. This fact and the declining
rate of new subscribers does not reflect a stable situation that
can be used to properly extrapolate into the far future. In particular Steve Case has mentioned the need to increase advertising at the
risk of further drops in subscription rates next fiscal quarter.

Take Care,
Joe



To: Raymond who wrote (9895)5/9/1998 5:14:00 PM
From: Tim Kenney  Respond to of 13594
 
>Harry:
Fair enough. However, I still think AOL is attractive based on P/S<

Boy, do I have some shares of bankrupt supermarket retailers I would like to sell you. They are a steal on a price to sales basis. I guess, however, that they just never quite made up for those unit losses on volume gains.


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