Thursday, November 5, 2015

Whatever Happen to AOL?

At one point in the 1990s, 50% of all CDs produced worldwide were for AOL. Although it was scorned by the digerati (including yours truly) it was the way that millions of people first got on-line.

At its peak, it had 35 million worldwide (26.7 million U.S.) subscribers. The stock soared so high and split so often that if I had stopped scoffing and bought in early, I would be comfortably retired by now.

AOL went public on March 19, 1992, at a share prices of $11.50. Had I bought 100 shares, it would have cost me $1,150.00. The stock split 7 times at 2:1 (meaning my original 100 shares would have become 12800) and if I had sold in December of 1999 (perhaps because I was concerned about Y2K problems) at ~$90/share, my original $1,150 would have become $1.152M. Talk about buying low and selling high!

Of course, we know that the AOL/Time Warner merger was, according to Forbes:  " such calamity when media giants AOL and Time Warner combined their businesses in what is usually described as the worst merger of all time", so all was not totally roses. Interestingly, AOL is still around and in mid-2014 still had 2.3 million dial-up​ users and is impressively profitable (although small) because most of the expenses have been amortized.

Ah with the right crystal ball to see the future one could do quite well.

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