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Technology Stocks : Internet Analysis - Discussion -- Ignore unavailable to you. Want to Upgrade?

To: Vendit™ who wrote (246)	3/29/1999 12:28:00 PM
From: Chuzzlewit	Read Replies (1) \| Respond to of 419

I take your point to be that the big Internet stocks are grossly over valued if they were presently mature companies Actually, I was asking the reverse question. How big, in terms of free cash flow or any other suitable parameter, would these companies need to be to support their present valuation if they were mature. For this purpose I define maturity as a company that grows no faster than the general population. I would think that a multiple of roughly 10x free cash flow might be appropriate. So a company like AOL with a market capitalization of roughly 125BB would need to be able to generate around $12BB annually to support it's current valuation. How long do you think it will take AOL to throw off that kind of cash, or do you think it will never be able to do that? The corollary is this: given AOL's current business plan, at maturity how big do you think AOL will be? TTFN, CTC