Steve Case - The Story of AOL's Architect

In July 2002, AOL TW also faced an SEC probe due to allegations of accounting improprieties at AOL in the months preceding the merger. All the above problems resulted in a fall in the company's share price during mid-2001 and late 2002 (in December 2002, AOL TW's share price closed at $13.54 as against $48 on the day of merger).

In late 2002, analysts stated that if the AOL division were to be taken out of the account, the TW divisions by themselves would generate 10 times of the AOL TW's estimated earnings for 2003 (Refer Exhibits III, IV & V for financials and share price movements of AOL before and after the merger). Media reports the world over blamed Case for most of AOL TW's problems.

The fact that Case sold a major part of his AOL stock soon after the merger was announced in January 2000 (when the price of the stock was high) and made an estimated profit of $160 million evoked suspicion and anger among shareholders. They thought that Case was aware of the fate of the merger and accused him of making money when the time was right, at the expense of the shareholders. After the merger, a shareholder of the company commented, "There is no shareholder in the company of any substance that wants him around. There is nobody at TW that wants him around. I do not think the majority of the board wants him around. So his only constituency is the AOL board members. That is all that stands between him and the door".