Hey, maybe they'll buy back the naming rights some day, too.
Yesterday I opined that the AOL death-watch could begin as early as today. It’s hard for me to see what this company is going to do to secure a future for itself.
Yes, it is an actual, live business that has, most importantly, a source of cash flow. But its biggest revenue stream is its ISP service, and that has a future about as bright as a Tiger Woods endorsement deal.
Investors haven’t been too keen on the stock either, which has gone nowhere in its one day plus of trading. But might the Street actually be undervaluing AOL?
Let’s not kid ourselves, probably not. But we’ll let Henry Blodget whet your appetite. (There’s a certain delicious irony to this piece, with Blodget, who made his name on the Street flogging tech stocks that could politely described as canine effluvium, flogging a tech stock that can politely be described as canine effluvium.)
“The smart money is now smugly in agreement that AOL will dwindle away to nothing,” he writes. And it might. But not before it surprises on the upside, gushes out more cash than its current market value, and makes today’s contrarians a nice return.”
First off, the company can sell enough assets to get shareholders about half their cash back. And, if they can somehow figure out some way to get those 6 million subscribers to somehow keep subscribing, well, then, some time before the company actually does dwindle away to nothing, investors will have seen a nice return. And that if they don’t pull the rabbit out of the hat, and actually become the “Time Inc. for the 21st Century.”
“So go ahead and snicker, smart money. Tim & Co. have you right where they want you: Ready to be positively surprised.”
Late in the morning, AOL shares are up about 0.2% at $23.58.
