AOL Off to a Wobbly Start

AOL set out on its own today, spinning off from parent Time Warner (TWX) and bringing an end to one of the most disastrous combinations in corporate history.

“As an independent company with a recognized global Internet brand, we will be competing for the future of content, communications and advertising and that is a very exciting and significant opportunity,” CEO Tim Armstrong enthused in a statement this morning.

Sadly, investors didn’t quite see it that way. AOL’s (AOL) shares dipped around 2.5 percent in morning trading, rose a bit in the afternoon and then finished the day in the red at $23.52.

That said, the share price has risen a bit after hours, though it’s anyone’s guess if that trend will continue on Friday. As UBS analysts Brian Pitz and Brian Fitzgerald said in a research note today, it’s likely to be a while before AOL wins investor confidence.

“We believe AOL is in the early stages of a turnaround and though we like management’s vision for the aspects of the business it can control (advertising), we expect the strategy to take at least a year before it begins to translate into sustained positive user and advertiser metrics,” the analysts wrote. “In the short term, we expect shares to trade down due to technical issues.”