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Technology Stocks : America On-Line (AOL) -- Ignore unavailable to you. Want to Upgrade?

To: DepyDog who wrote (9198)	4/2/1999 7:36:00 PM
From: Bala	Respond to of 41369

Accounting Questions Don't Dent AOL Stock washingtonpost.com By Shannon Henry Washington Post Staff Writer Friday, April 2, 1999; Page E01 Wall Street appears to be shrugging off the latest questions about America Online Inc.'s accounting methods. Dulles-based AOL, the world's largest online service, recently formed an alliance with Sun Microsystems Inc. at the same time it was purchasing Netscape Communications Corp. The Wall Street Journal reported Wednesday that if federal regulators rule that Sun, through the alliance, really purchased Netscape's corporate software business, AOL could have to account for the deal in such a way that it might be hit with $9.7 billion of charges against earnings over a number of years. It sounded like disturbing news. But that day, AOL's stock rose $2.50 to close at $147 on the New York Stock Exchange. Yesterday, the stock rose $3 to end at $150. "Normally, when there's an accounting issue raised, the stock gets killed," said Robert Willens, tax accounting analyst with Lehman Brothers Inc. in New York. "The market is unconcerned." Willens said he was with several portfolio managers in New York the morning the Journal report came out, none of whom were worried about AOL's accounting practices. "The deal is a great deal," Willens said. America Online said it does not expect any accounting problems stemming from the purchase of Netscape, a software maker based in Mountain View, Calif., or the partnership with Sun, a computer and software manufacturer based in Palo Alto, Calif. "Our accounting for the Netscape acquisition as well as the structure and governance of the alliance were fully disclosed in a filing with the [Securities & Exchange Commission] prior to the close of the acquisition," said AOL spokesman Jim Whitney. "Nothing has changed since." In 1996, some analysts' questions led AOL to abandon a controversial accounting practice that critics said enabled the company to show more profits than it was taking in. That change forced AOL to incur a $385 million charge against earnings. This time, however, many analysts dismissed the Journal's report. They noted that the SEC has already approved AOL's accounting method and said they doubted that the issues raised will present a problem for the company. Even Abhishek Gami, an analyst with William Blair & Co. in Chicago, who was quoted prominently in the Journal story, said: "I really think there's nothing there." "I believe AOL's accounting is 100 percent correct," Gami said in an interview yesterday. "Everything they have done follows the rules." Warburg Dillon Read of New York issued a report Wednesday saying the Journal article was "totally false," noting that the merger has closed, with approval from accountants and the SEC, and there should not be any ongoing charges except for an expected one-time write-off. Bear, Stearns & Co. weighed in yesterday, releasing a report titled "Accounting issues? We think not." The report went on to say, "AOL stated that the quote in the article from a Wall Street analyst was taken out of context and was in reference to a hypothetical situation." Because Netscape employees are on AOL's payroll, AOL, not Sun, has control, Bear, Stearns said.

To: DepyDog who wrote (9198)	4/2/1999 7:48:00 PM
From: Voltaire	Read Replies (1) \| Respond to of 41369

DepyDog, I can't speak for Vendit but I personally feel that in the U.S. it will turn out to be the most overrated debacle, crisis, catastrophe, Armageddon of our time. That is not to say there will not be bothersome and irritating glitches of all types but nothing that warrants wholesale liquidation of stocks or putting off the birth of a child for Christ sake. To me it is extremely logical. The problems, severity and frequency of such will be INVERSELY PROPORTIONAL to how much money is at stake. What was the first major area in the U.S. that was pronounced as 100% compliant? You betcha - the U.S. stock markets! What was next? The Social Security System. So, you can see the pattern that I speak of, if Billions of dollars are involved, don't sweat it. You can bet, the phones will work, gas will work, cable will work. Now for Airplanes etc, I have a good idea, load all of the Chief Executive Officers of all the major airlines on a 757 and have them make a night landing in Tibet around 1:30 A.M. on the morning of Jan. 1, 2001. Something tells me there would not be a problem with the Airlines either. From the porch, Voltaire

To: DepyDog who wrote (9198)	4/2/1999 8:11:00 PM
From: Vendit™	Read Replies (3) \| Respond to of 41369

When you said Thanks in advance for your wise ideas. I am certain you were directing your statements to Voltaire and I have been waiting for his reply which I am confident was delayed by some flashy blond, so I'll give you my short take. 1) y2k is a trumped up by the media "pipe dream". 2) Wall Street as well as the power companies and airlines are ready willing and able to withstand the flip over of the clock come New Years eve 12:00. 3) My brother (Ph.D. in finance) says all major banks are compliant and ready and don't see this as any big deal. If you bank at the local YMCA I would recommend a change. (Just kiddin ya Dixie) 4) Follow these news links and you can see what is taking place. At the bottom of the page you can regress further in time if you click the "more news" link. marketwatch.newsalert.com I have a very good news release bookmarked about this subject but need a few minutes to lay my hands on it. As far as what will I do. I'm staying long on my long term investments like AOL. I don't want to suffer the tax consequences that selling would invoke should I sell. I personally do not expect much if anything out of the ordinary as far as a wall street sell-off but of course I am assuming that the average investor has enough intelligence to realize that this is being exploited by a few profiteers and hyped by the media. I will have ready cash to jump on any value plays should I see any end of the world sell off taking place which I am sure would be short lived. Vendit