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

To: robert duke who wrote (12984)	12/23/1998 4:17:00 PM
From: Craig A	Read Replies (1) \| Respond to of 13594

I totally agree with you . Watched this before.

To: robert duke who wrote (12984)	12/23/1998 4:41:00 PM
From: Dr. D	Read Replies (2) \| Respond to of 13594

Thats exactly what I am expecting. But it did not work all that well today. If we get more downgrades it will confirm there strategy. this should really be fun when the NYSE starts trading 18 hrs. a day. Merry Christmas to All 3d

To: robert duke who wrote (12984)	12/23/1998 10:35:00 PM
From: Jorge	Read Replies (1) \| Respond to of 13594

Robert...Congratualtions to you and your AOL position. In regards to the downgrade today from CSFB here is an article to help understand their reasoning....Notice in the beginning of the article they say NOTHING has changed about the FUNDAMENTALS...That right there tells me to HOLD..HOLD any Stock whose company FUNDAMENTALS have not changed.....They go on to state they believe AOL is a little high priced right now, but after they see the upcoming CABLE and ISD deals AOL is known to be working on they may up their rating again...Believe me, before the end of 1999 CSFB WILL BE UPGRADING AGAIN.....Also notice they said THEY EXPECT AOL TO OUTPERFORM THEIR OWN ESTIMATES. ************************************************** Credit Suisse First Boston (Buyer, Lise (650) 614-5088) CREDIT SUISSE FIRST BOSTON CORPORATION Equity Research - Americas U.S./Technology/Internet-New Media Lise Buyer 1-650-614-5088 lise.buyer@csfb.com Tracey Ford 1-650-614-5157 tracey.ford@csfb.com BUY LARGE CAP America Online (AOL) (Intro stuff here) We are downgrading shares of America Online from a Strong Buy to a Buy. While we believe the fundamentals remain very strong, we reserve the "Strong Buy" Rating for those securities where we can do the math to justify a significantly higher target. In this volatile Internet arena, we have used to the Buy rating for stocks which continue to exhibit upward momentum, but where, as we have said on numerous occasions, fundamental analysis is currently less helpful. We remain big fans of AOL. However, given an increase of 124 % since October 27th, as compared to an increase of 14% for the S&P500 over the same period, we no longer feel comfortable with the Strong Buy designation. We fully expect the company will outperform our published estimates for the current quarter where we look for $938 million in revenue and $0.14 in EPS, but even an extra $100 million in higher-margin commerce revenues would have only a modest impact on near term EPS. When we initiated coverage, we offered a valuation matrix for this stock based on estimated subscriber growth, "other revenue" growth and estimated subscriber life. If we return to that analysis to justify a "strong buy" recommendation ( implying 30% upside from the current valuation) we would have to assume 17 million customers with an average membership duration of 60 months, each generating $5.00 in incremental revenue (other than subscription) per month by the end of FY99 (June). While nothing is impossible in the world of on- line access and commerce, and while we are believers in the AOL story, we think these assumptions are too aggressive. Eventually, we expect AOL to announce a broadband strategy, which we believe will involve both cable and DSL solutions. Once we have more information on that plan, we will revisit those assumptions again, but hesitate to do so until we have factual data on those plans. ********************************************* Regards, George