Will Wall Street Heart AOL Today (Even if It Partied Hearty at the NYSE Last Night)?

This morning, after AOL execs ring the opening bell at the New York Stock Exchange, the latest chapter for the long-troubled Internet icon begins as it tries to convince Wall Street that this time will be the charm.

AOL officially spins off from Time Warner when the markets open for trading on the NYSE, and here is what the company is whispering to investors:

Really. We promise this time will be different. Really. Not like the last time we promised and it was not different at all and, to be honest, was worse! Or the 17 times before that. Cross our hearts. We’ve changed. Really.

Still, despite AOL’s various missteps over the years–including being part of one of the more disastrous mergers in history–several big investors BoomTown asked this week said they were willing to give the company a break.

Shareholders of record at 5 pm ET on Nov. 27 got one share of AOL for every 11 shares of Time Warner (TWX) on the day of the long-expected spinoff of the Internet service.

A typical response was Henry Ellenbogen’s of T. Rowe Price. While noting he does not comment on the firm’s trades, he added: “[AOL CEO] Tim Armstrong has laid out a thoughtful plan focusing on rebuilding the fundamentals of the business.”

As a big holder of Time Warner shares, T. Rowe Price now has a clutch of AOL stock–which will trade under the “AOL” ticker–from its 3.64 percent stake in the media giant.

Another big stockholder of AOL, who wanted to remain unnamed, said much the same: “They still have tons of problems and issues. But, I really like Tim. If it can be turned around, he’s the best guy to do it.”

Added the investor: “It’s very cheap, so I think it’s like owning an out-of-the-money options. You can make a lot of money if it works
when you start with a $2.4 billion market cap.”

That’s what AOL is valued at today, although it was worth a lot more only a month ago, a valuation based on Time Warner’s share price, which made AOL worth just over $3 billion when the spinoff plan was announced. (The stock has actually been trading on a “when issued” basis.)

But let’s have a moment of solemn reflection: AOL was valued at about $163 billion at the turn of the century.

In any case, the real game begins this morning, when AOL flies free from Time Warner for good (riddance?).

The new company’s execs and clients were certainly flying high last night on the floor of the NYSE, where AOL held a big, honking party.

Here’s a video I did of the event, which includes a parade of AOL execs posing with guest celeb, Diddy.

As in the hipster rap mogul, who has also been known as Puff Daddy, P. Diddy and, of course, Sean Combs, whom Armstrong should put on the AOL board pronto.

Maybe then we can say AOL has definitely changed!

Judge for yourselves from this video (I will also have another video up later of my interviews with various AOL execs at the party, and you can see the video tour of AOL HQ and an Armstrong interview I did yesterday here):