When a stock trades at 218 times the coming year's earnings estimates

after

losing 31% of its value in a month, it's easy to find bearish investors. Never mind the naysayers, however, when it comes to handicapping

America Online

(AOL)

. The investors who call themselves bulls are enough to scare the masses who've made AOL their proxy for investing in the Internet.

Even this optimistic bunch sees bad things in store for AOL in the near term.

"Given the range of possibilities right now, it's likely AOL is overvalued," says Randy Befumo, an analyst with

Legg Mason Fund Adviser

in Baltimore.

Befumo is more than a casual observer. His boss, William H. Miller III, manages $15 billion worth of assets in two funds, both of which have 10%-plus of their holdings in AOL stock. Despite being one of the most successful "value" mutual fund managers around, Miller has been -- and remains -- a champion of richly priced AOL.

But even the Legg Mason team acknowledges that AOL's shares likely have further to fall. Befumo notes that his discounted-cash-flow analysis suggests a range of 60 to 80 for the stock. "Other metrics," he says, yield a range of 50 to 115.

Legg Mason is a long-term player, and Befumo concludes that AOL continues to be a long-term winner. (Befumo should know. He once penned a column under the cyber-nym MFTemplar for the

Motley Fool

, a financial information service that rose to prominence at AOL.) But it doesn't take sophisticated number-crunching to see why AOL should keep slipping. Wall Street's per-share earnings estimate for the year ending in June, 2000, is 55 cents. That means even if AOL traded at a lofty 100 times forward earnings, it'd be a $55 stock. The problem is that AOL isn't growing its earnings at anywhere near 100% a year. Estimates are for next year's profits to be 57% above the current year's.

(For the record, of the 35 analysts

Zacks

counts who follow AOL, 21 have strong buy recommendations and 14 have buys.)

Huachen Chen, a portfolio manager with

Dresdner RCM Global Technology Fund

in San Francisco, comments: "I'm not sure it's going to do so well in the next few months." Chen says he's been trimming his fund's position in AOL, though he isn't touching the shares in his personal account.

AOL's biggest near-term threat is losing the cable TV game of musical chairs being played by

AT&T

(T) - Get Report

,

@Home

(ATHM) - Get Report

,

MediaOne

(UMG)

,

Comcast

(CMCSA) - Get Report

and

Microsoft

(MSFT) - Get Report

. That's because the faster U.S. consumers get high-speed Internet access the sooner they'll consider ditching AOL's dial-up service.

Why 26 days?

Commenting on the

item here Wednesday about

Morgan Stanley Dean Witter

initiating coverage 26 days after the IPO of

Extreme Networks

(EXTR) - Get Report

, a reader wondered if the correct time period was, in fact, 18 days. Nope, 26 is right. But that begs another question: Why?

Basically, the 26-day post-pricing quiet period (offerings typically are the day after pricing) coincides with the month-long period in which underwriters may act to stabilize a new issue by using their own capital to buy shares in the open market. It's a service that big investment banks use as a selling point when pitching business.

But the quiet period has become something of a crock. Institutional investors know from the IPO roadshow exactly what analysts' estimates will be for the young company. Besides, with the huge bucks being thrown at IPOs these days, stabilization -- market manipulation under other circumstances -- isn't as necessary anymore.

"This is one of those prehistoric rules that has lost its meaning as markets have become more and more liquid," says Ivo I. Welch, a finance professor and IPO specialist at the

UCLA's

John E. Anderson Graduate School of Management. "If a stock wants to go from 100 to 25, the underwriter isn't going to be able to do much anyway," adds Welch, who runs a nifty IPO-oriented Web

site.

Incidentally, after Morgan Stanley Dean Witter analysts set the tone with a relatively surprising neutral rating, shares of

Extreme Networks

(EXTR) - Get Report

have continued their slide, falling Wednesday from 45 3/4 to 41 3/4, and closing Thursday at 40 11/16. This despite new recommendations by

BancBoston Robertson Stephens

and

Dain Rauscher

of buy and strong buy, respectively. Shares of the networking products company remain far above their April 9 offering price of 17.

Human resources

: Daniel H. Rimer, the 28-year-old "business-to-business Internet infrastructure" analyst for

Hambrecht & Quist

in San Francisco, has at least one other really cool title. Rimer recently was appointed High Commissioner for Economic Development for the Canton of Geneva, Switzerland.

Rimer, who -- despite his youthful looks -- still allows folks to call him "Danny," says he reckons he's the only Internet professional in Northern California who also is a native of the Swiss city-state (any disputants out there?). Geneva hopes some of Rimer's Net expertise will result in new business over there. So what does a high commissioner fetch in salary these days?

Deadpans Rimer: "I get a stipend to entertain."

Adam Lashinsky's column appears Mondays, Wednesdays and Fridays. In keeping with TSC's editorial policy, he doesn't own or short individual stocks. He also doesn't invest in hedge funds or other private investment partnerships. Lashinsky welcomes your feedback at

alashinsky@thestreet.com.