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

To: robert duke who wrote (10360)	4/12/1999 1:23:00 PM
From: mrnaive	Read Replies (2) \| Respond to of 41369

RUMOR OF A SPLIT Here's the latest posting in the Rumor Mill: America Online (AOL) provides easy access to the Internet, as well as a variety of online services: electronic mail, conferencing, software, computing support, interactive magazines, and online classes. With some sixty percent of the total market share, America Online is the top provider of online services in the world. The AOL approach appeals to a wide range of subscribers, including those seeking entertainment, educational sources, and business information. Subscriber demands for flat-rate pricing and growing competition have led AOL to look for revenues beyond those provided by subscriber fees alone. The company now sells advertising on its Web site and markets the services of other businesses, collecting fees on sales to AOL subscribers. AOL stock is one of the most popular on Wall Street. Many times, the AOL volume exceeds that of any other issue. The price is up more than 100 percent, since the first of the year. The brokerage houses continue to think well of the firm. Of the 31 following the stock, 23 have issues "strong buys" and 8 have recommended "buys". We are hearing rumors of good news from the company. The most persistent is speculation that the stock will split. That may seem a bit farfetched, given that America Online split three times (2-for-1) in the past 13 months. On those three occasions, the share price was between $130 and $170. Shares are currently selling for $158 1/2, a level at which the company has demonstrated that it likes to pull the trigger. Are there enough shares available? Shareholders have authorized the company to issue 1.8 billion shares. With the recent purchase of Netscape, just over one billion have in fact been issued. There are not enough shares for a 2-for-1 split, unless the board approaches the shareholders for more. There are, however, enough shares for a 3-for-2 split. We think that the AOL board will consider such a split, in order to get the share price down to a more a accessible point. Over the past 52 weeks, the stock has traded in the range $17 1/4 to $175 1/2. Should you decide to invest, use a stop-loss of $145.