Needham & Company Maintains a 'Buy' on AOL, Inc. (AOL); New Catalyst for Public Shareholders

Needham & Company maintains a 'Buy' on AOL, Inc. (NYSE: AOL) price target of $20.00.

Needham analyst says, "Starboard Value announced yesterday that it owned 4.5% of AOL, making it one of AOL’s largest shareholders. The positive investment implications of this development include: 1) Short-Covering - As of Nov 30, 2011 there were approximately 13.7mm shares short, according to Yahoo! (Nasdaq: YHOO) fiancé. With an activist shareholder involved at AOL, we believe many of these short-sellers will cover before December 31, 2011; 2) Highlights Undervaluation - We agree with Starboard’s conclusion that AOL today is trading at the value of its cash on the books plus the NPV of the FCF streams from the access business; 3) Impatience - The rise of an activist shareholder suggests that public markets are becoming increasingly impatient. Starboard’s demands should result in AOL shortening its time frame of creating shareholder value, whether or not Starboard is successful garnering Board seats."

"The negative investment implications of this development include: 1) Turnarounds take time; 2) Attract new shareholders; and 3) Attract new shareholders."

For an analyst ratings summary and ratings history on AOL, Inc. click here. For more ratings news on AOL, Inc. click here.

Shares of AOL, Inc. closed at $15.10 yesterday.

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