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

To: Ray Dash who wrote (11104)	4/17/1999 11:08:00 AM
From: Cyrus	Respond to of 41369

Excerpt from Barrons Apr 17/99(The Trader) The nearby chart could be captioned "What Are the Kids Doing for Fun These Days?" It could also be inscribed on a tablet for the Church of What's Working Now, as it depicts the past year's dramatic movement in the shares of America Online and AMF Bowling, two companies that would like to make their respective services an integral part of Americans' lives -- only one of which, needless to say, is succeeding. The AOL story is overly familiar. Having become the Ma Bell of the Internet generation while allowing America's youth to slow the performance of the Web during the after-school rush hours, AOL has now joined the top 20 most valuable companies in the stock market. Unlike its greener progeny among 'Net stocks, AOL does indeed have earnings, every dollar of which has been capitalized with $400 of investors' money. You've Got Mail, a movie about the romantic possibilities of chatting anonymously via AOL, took in some $113 million at the box office. Such a cultural landscape makes it rather tough on the lesser-known AMF which resides on the other end of the leisure-time economy as the biggest name in bowling, about the farthest thing from "virtual" entertainment conceivable. AMF, which was bought earlier this decade in a leveraged buyout led by Goldman Sachs and then taken public in late 1997, is not profitable, because of its continued high debt load. But it had cash flow of $130 million last year on $714 million in revenue. The market is paying 30 cents for every dollar it collects in sales from rounds played and pizza consumed. At a recent 4 1/8, AMF shares were fetching half its year-end book value -- though cumbersome or unrecoverable things like property and equipment and goodwill make up its bulk. Hollywood's recent contribution to the world's store of bowling-related art, Kingpin, failed to crack $25 million in domestic gross. AMF is exactly the sort of stock this market hates right now: tiny market value, a company that plies a no-growth industry, its business capital intensive and substantially exposed to Asia (a big market in bowling products). For that reason, it has not a single promoter on Wall Street. Yet not two years ago, it tickled every nerve on the Street with its then-trendy attributes: It was a "roll-up" company seeking to consolidate the fragmented bowling-alley industry, it was looking to invigorate an "underleveraged brand" and it had muscular Wall Street backers in Goldman. It's now basically the same business, valued at a fifth of what Goldman priced it at 17 months ago. Now, though market veterans will talk about how surging bowling stocks were the 'Net stocks of the early 'Sixties, those two lines on the chart stand virtually no chance of ever crossing. So despite what a patient and grizzled tangible-value seeker might secretly wish, the market will continue rewarding the more dynamic enterprise. After all, the 'Net has vast business and communication potential, has knit together the world. And you don't have to rent ugly shoes to log on.

To: Ray Dash who wrote (11104)	4/17/1999 11:13:00 AM
From: StockMiser	Read Replies (1) \| Respond to of 41369

Did anyone see Steve Harmon's post from Friday on this pullback? Message 8957295 ------------------- Here it is, Steve Harmon says: selling on a downswing often provides fuel to the fire i believe investors need to always be aware of their positions and what they need to take off the table to cover their cost basis and then invest with the gains (if any) but a selloff is good to me since the internet segment has been blazing let it cool a bit and selective buying makes more sense i enjoy it when market leaders get caught in the downdraft for no fundamental reason -- in the past that triggers buying in them again corrections on emotion/profit taking are normal it's when the underlying fundamentals (revenue/earnings/growth/users/buyers) show weakness that i get worried...and that isn't behind this selloff...pure profit taking in my opinion