What gives with this? See http://www.smartmoney.com/marketmap/

-- Jonny (jonnyb@good.com), January 11, 2000

Answers

This is a "dog's breath" of a merger. AOL sells a service that is dramatically falling in price. The stock is probably only worth 410 or less. If I was a Time-Warner shareholder, I would be bailing out of this before it becomes toilet paper.

-- Ishkabibble (ishman@home.com), January 11, 2000.

Preeeee-cisely. Tech stocks are massively overvalued. Pretty much all tech companies are turning the money hose on full blast in an attempt to grab a dominant market share (i.e. a monopoly) which is where the Big Money is in the long term (ask Microsoft). The rocketing share prices are driven both by long term investors getting in on the ground floor, and by short term profiteers who KNOW that tech prices rocket, so they can make a quick buck.

The thing is, AOL will have largely shaken off the short termers. And those long termers were expecting to rake in the dividends when AOL finally "matured"; for many years now, they've been teasing them and saying "Soon, soon.". Now that they've merged with Time Warner, that's it, AOL is mature and has to be treated as a conventional company, not a "get in on the ground floor" startup. We've reached the Long Term, and those investors want to see their rewards, now.

Unfortunately, the theme from AOL and Time Warner is "onwards and upwards", i.e. more and more spending. All those long term investors are just saying "Nope, do that with someone else's money. We're out."

-- Servant (public_service@yahoo.com), January 11, 2000.