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

To: Keith A Walker who wrote (10492)	6/30/1998 12:53:00 AM
From: jack rand	Read Replies (2) \| Respond to of 13594

Especially given that it was via block trade, a possibility is that it's related to AOL's 11/97 $350 million convertible 4% note offering to institutional investors. If so, some smart money is bailing from what amounted to a nifty option on AOL stock -- Loan at 4% convertible to AOL at $52/share. The notes are convertible into a total of 6.7 million shares. On 6/11 an S-3/A was filed; and 06/24 and 424B listing selling security holders. The notes were originally sold by Goldman, BT/AxB, Lehman, and Cowen. Among the listed selling holders are BA/RS, Merrill and Smith Barney in addition to GS,BT/AxB. In addition on 6/18 AOL filed S-8 registering 6 million shares for employee options, of which 2.7 million have been granted. Anyway, the timing of the sale two weeks and 20+ points after the rumors of AT&T buyout etc. is interesting.

To: Keith A Walker who wrote (10492)	6/30/1998 5:07:00 PM
From: Raymond	Read Replies (1) \| Respond to of 13594

Keith: I guess you've never got stock options grant from your employer. We've talked about this issue on this thread some time ago, and it appears that you still don't understand that the company does not need to keep cash reserve for stock options exercise by exployees. The company simply creates new shares, and this is where the dilutions come from. >>$500 million new common: Possibly needed to cover options grants to employees. This will be problematic for AOL as employees move to cash in on options that are "way in the money" by now. Will only further dilute earnings.