Why the New AOL Shares Aren't so Appealing

Early investors might profit from the AOL's return as an independent company -- but its long-term prospects aren't promising.

America Online stock, which went public in 1992, made many early investors rich. Shares soared more than 10,000% over the next seven years as the company introduced millions of people to the Internet. But AOL, as it is now known, is unlikely to do the same for current investors. In fact, we think AOL faces a daunting future in its return as an independent company.

With its spinoff from Time Warner completed, the new AOL (symbol AOL) began trading for the first time as an independent entity on December 10. The stock, which had been trading on the New York Stock Exchange on a “when-issued” basis since November, opened at $23.39, then remained fairly flat for the rest of the day. It closed at $23.52 on light volume.

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Contributing Editor, Kiplinger's Personal Finance