AOL Time Warner Inc. stock sank to a three-year low Wednesday after a Lehman
Bros. Inc. Internet analyst downgraded the company.
Lehman's Holly Becker reduced her rating to 'market perform'' from 'buy,''
based on the market performance of the America Online Inc. Internet
She was worried about competition for high-speed Web customers and slack
online ad sales, predicting that the unit's cash flow will at best stay flat
until 2005, an extremely long period.
Becker cut her price forecast on the stock to $27 per share from $35.
AOL's shares dropped to as low as $22.88 each Wednesday but closed at $24.20,
off 5 percent for the day.
Becker estimated that AOL Time Warner companywide cash flow will increase
just 8 percent.