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Time Warner Inc. Message Board

  • freeball2 freeball2 Feb 14, 1998 2:29 PM Flag

    Call for truce

    I am new to this board (and will probably get flamed from both sides) but I've studied the postings of the last two weeks and here's my analysis. It seems clear there are two diametrically opposed world views.

    1. The Anti-AOL camp hates AOL's guts. They predicted AOL would miss earnings. Stock would fall after earnings. Think AOL over-valued on fundamentals (PE,ROE). Believe AOL manipulates numbers, specialists manipulate the stock price. They tend to be more short term (options) oriented.

    2. The Pro-AOL camp loves AOL and its prospects. They propose alternative valuation models: eyeballs, Internet growth, media company models etc. Tend to be more long-term oriented (no mention of options).

    It seems to me the pro-AOLers have won the current battle (not the war). In these two weeks, AOL is up from 90 to 114. AOL did not miss earnings. The stock hasn't dropped substantially, probably buoyed by the incredible general market move. Investors apparently liked the $2 price hike and split announcement. The market has spoken. Chances are we will see a consolidation at the $110-115 level for a while (like YHOO for some time at $60-65).

    The current bickering seems pointless and merely about daily price fluctuations. So why not call a truce? State your assumptions and predictions. And follow along calmly till the next breakout.

    For full disclosure: I'm a very long term AOL long, but lost my head in early January, and sold Jan. 2000 120 LEAPS (after reading a stupid article in the Barron's Round Table) to hedge,and am currently stymied in never-never land.

 
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