Discussion in 'Trading' started by marketsurfer, Jan 29, 2003.
ted turner just quit as vice chairman of AOL .
Each time AOL takes a hit, it looks like a better and better long term play. It's going to be a frickin wild ride, but its just too damn compelling.
But seriously, a $100 billion annual loss? They LOST more money than most companies are worth.
I thought it was a $45bln loss.
So, who's gonna be shorting AOL tomorrow morning?
4th quarter was $45 billion, $100 billion annual. The largest in US business history.
Yeah, but most of the loss is non-cash.
Btw, why is AOL such a compelling investment? I think it's a dog.
I'm talking from an investment standpoint, not a trade. Its trading below book, Time Warner is almost definitely going to get spun off in the next 12 months, ad revenues are starting to increase, and they just sold off a $800 million stake in a lousy electronics company to reduce their debt. Fundamentally, they should be valued higher. That is, if you believe in fundamentals.
But it is going to tank on the open tomorrow because of the Ted Turner resignation.
Dude, I always use the fundamentals.
First, the book value has been inflated by intangibles like goodwill. Today's write-off is a testament to that. Second, you think time Warner will be spun off? Not gonna happen anytime soon because the capital markets are in terrible shape. And, third, the $800 mln is a drop in the bucket compared to AOL's total debt.
2 great short plays are AOL & BRCM. (Keep in mind though that BRCM has been slaughtered nearly 40% this week alone) I especially like the contrarion perspective in that so many fund guys and so called gurus were calling the bottom for AOL when goof # 1 left a couple of weeks ago. It reminds me last year when for the first time ever AOL was flirting with the $20 mark. I forgot which house it was, but someone put in a buy limit order of $19 for some sick amount of shares, I think it was 100,000,000. Thus at that point in time, the bottom was supposed to be there. yeah, I wish I could have taken the other side of that trade.
BRCM is another classic, a billion+ dollar right down out of nowhere & the founder leaves. If we have learned anything from the past, just because the top dogs leave does not mean the worst is necessarily behind the company. In fact, many times the worst is just beginning for the stock price.
The AOL slopes are going to be freshly powdered. Time to go wax my skis.
Separate names with a comma.