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When the company initially climbed into the new issues pipeline earlier this year, America Online Latin America (proposed symbol AOLA) looked poised to crack the IPO piqata wide open. But after some eleventh hour reshuffling just ahead of its debut, the AOL and Cisneros Group joint venture shows signs of having been stricken with a wretched case of Montezuma's Revenge.

With Salomon Smith Barney serving as master of ceremonies, AOL-LA was originally slated to fill its war chest with a whopping $700 million (roughly $6.6 gazillion Pesos). For a start-up venture launched barely two years ago, it didn't take a rocket scientist to figure out that its original IPO plans were little more than a pipe dream.

After settling on a trimmed offering size primed to raise $400 million, institutional investors thumbed through the company's prospectus to find a paltry $5 million in revenues saddled with hemorrhaging losses of $50 million for the nine months ended March 31. With sagging share prices and growing competition in the Spanish-language portal patch, it was back to the drawing board.

Yesterday, the newcomer's offering terms were slashed nearly in half, clearly showing signs of underwhelming investor sentiment. Floating 25 million shares between 8 and 10 bucks a pop, AOL-LA's hoping a leaner, meaner demeanor will do the trick for its Friday IPO.

Even with a revised quarter billion dollar deal, the road ahead won't get much easier. The company boasts just 130,000 Internet subscribers in almighty Brazil, territory blanketed by well-heeled rivals with deep pockets. With the likes of Terra Networks and Universo Online (UOL) muscling in with free Internet access, AOL-LA has scrambled to cut the price on its all-you-can-eat access by a third.

In addition, over three quarters of AOL-LA's subscribers don't have plastic in their wallets. That means instead of a revolving door of credit, Brazilian subscribers settle up on their bills at their local banks. In other words, "the check is in the mail." Can't make your payment? No problem. Just switch to any number of free ISPs and use the AOL-LA invoice to line the kitty box.

Despite a rocky start and an uncertain outlook, AOL-LA's determined to make a go of it. With America Online looming like a rich uncle, the sibling is hoping to compete for investor dollars on sheer namesake alone. But, here's the good news. If AOL-LA can finally squeeze its big behind onto the tech-heavy Nasdaq, the upstart will have a wheelbarrow-full of monopoly money - and that spells trouble for rivals.

Once the company has currency, it'll be on the prowl to scoop up smaller rivals. Think Pac Man with maracas. And many competitors, worn to the nub amidst recent market volatility, will jump at the chance to climb aboard the AOL-LA locomotion. StarMedia is stuck right at its May 1999 debut price of $15, 75% off its 52-week high. Yupi postponed its $100 million offering in April, while El Sitio looks headed for the showers at $4, 90% off its all-time high.

So does that make AOL-LA a good buy? Not likely. With a half a billion dollar market cap right out of the gate for a mere bit player making pocket change, retail investors will be shelling out a handsome premium to be sure. The money raised will probably last less than a year against an accelerating cash burn rate. That means day-traders can expect a secondary offering before year's end, adding to an already bloated float. I wouldn't bet against an AOL offspring enjoying an initial warm welcome in its debut, but junior's college money would be better invested elsewhere.

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