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

To: Bretsky who wrote (1815)	6/5/1999 3:41:00 PM
From: George Martin	Read Replies (1) \| Respond to of 4337

Bretsky - Thanks for your comment. Enjoy your posts on many SI threads. Re: ATHM vs. AOL, etc., FWIW, my view is that so much of market reaction is based on perception and "psychology" and extrapolation into the future, overreaaction is just part of the investment landscape. I felt there was substantial overreaction to AOL because of its temporary perceived deficiency in the broadband arena and the stock price took a hammering in part due to that. Now, it seems a similar overreaction has begun in the opposite direction to ATHM's detriment, temporarily, I believe. Check out the earnings projections from Yahoo Finance: biz.yahoo.com With ATHM now more than 50 % below its recent high, it's trading roughly 200 + times projected FY 00 earnings of 44 cents, with projected earnings growth of 60 + %. By internet standards, this is not bad -- stock price 94 versus 198 makes the valuation more reasonable, IMO, and apparently actually finite ! Also, since ATHM is growing off a much smaller base -- (wasn't THAT long ago, they only had 75,000 subs ) -- seems unlikely they wouldn't maintain at least that growth rate for next 3 to 5 years. Integration with XCIT should help that as well, featuring attractive portal / destination content with broadband pipe. Finally, even if implemented doesn't appear ruling would preclude the kind of bundling of "multi-service value packaging" that T seems intent on offering. Clearly this could still be a significant "marketing edge" particularly for new subscribers. Anyway, those are my thoughts. Definitely a plus for AOL in terms of perception and market psychology but not THAT bad for ATHM at this price level. For me since all my ATHM and XCIT shares are in a taxable account, definitely will ride this out. Thinking of adding some to non-taxable account and trim back in the future without taxable consequences. Regards, George Martin