Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: Tri Bui who wrote (14487)	5/3/1999 5:46:00 PM
From: RocketMan	Read Replies (3) \| Respond to of 41369

For what it's worth, here is my take on the AOL situation. The drop in AOL's price has nothing to do with AOL or with the UMG affair, it has to do with more money moving out of techs in order to play the cyclicals. If you notice, ATHM was down along with AOL. If this action had to do with the cable situation, ATHM would have gone up while AOL went down. In addition, with the Dow up 225 points today, it is evident that a lot of money wanted to be in those 30 stocks, and in many of the beaten-down issues. When those issues top out, the money will flow back into the techs. As far as the techs and AOL, I unfortunately see a bit more downside before I see it bottom, because the TA does not look like it turned around. It could have gone either way today, and with the strength in the Dow it went down. However, I think we are close to the bottom, it is now testing a support level and the next few days will be critical. But I just don't see a major downside from this level, and a good entry point. As far as the fundamentals, they are intact. AOL still has 17M subs, still has DSL rolling out this summer, is still growing its ecommerce and ad business, and is still building a new media powerhouse. And let's not forget the wireless device this summer. Broadband is very premature, and I for one am very happy that AOL did not get into a bidding war over Comcast/UMG. Remember, even in 2002 there will only be as many cable subs as AOL has today. Who knows how many worldwide subs AOL will have by then? The downside, as I see it, is still in the interest rates. If they hit 6% the entire market will be at risk of a selloff. But I don't see that happening, because there is still no sign of inflation. So I am still putting AOL away and not worrying about it. JMHO Disclosure: long on AOL