NEW YORK (CNN/Money) – Investors seem to be running out of patience with AOL Time Warner.

Shares of AOL Time Warner (AOL: Research, Estimates) have plunged 17.3 percent since last week's reporting of the largest corporate loss in history, an unenthusiastic forecast for 2003, and the departure of Ted Turner. The stock closed Monday at $11.55, more than 75 percent below where it traded when the merger of America Online and Time Warner closed on Jan. 11, 2001.

It has become increasingly clear to Wall Street that AOL Time Warner CEO Richard Parsons needs to do something to get the stock's price moving higher again. (AOL Time Warner is the parent company of CNN/Money.) While no one is expecting dramatic announcements in the very near term, here are Parsons' options, and the risks associated with them:

To pay off its more than $25 billion in debt, the company already has announced it is looking to sell its book publishing division, and is widely thought to be interested in shedding its three Atlanta-based sports teams as well as its 50 percent stakes in cable networks Comedy Central and Court TV. It also is planning to spin off a minority interest in its cable division to the public during the second quarter.

But speculation is starting to mount about how the company might need to do something even more dramatic. The Wall Street Journal reported Friday that AOL Time Warner executives are beginning to debate selling Warner Music, which accounted for 10 percent of revenue in 2002. In a CNN/Money story originally published Thursday, two analysts estimated that Warner Music could be worth $4.6 billion on a stand-alone basis. The notion that the company would sell the AOL division if it fails to turn around this year also is gaining currency.

An AOL Time Warner spokeswoman would not comment on speculation about specific sales. But even some more bullish owners of the stock are starting to think that divestitures would make sense.

"There obviously is going to have to be a lot of changes. They've got themselves in very, very deep trouble, so asset sales are inevitable," said Matthew Kelmon, president of Kelmoore Investment Co., a mutual fund firm that owns about 500,000 shares of the stock.

However, Kelmon thinks the company should not rush into deals. "Conditions right now are very tricky. The economy is still stuck in the mud and you don't want to sell everything at the bottom of the cycle," he said.

Another problem with any possible sales, says Ron Young, media analyst with mutual fund company Evergreen Investments, is that the assets the company would want to dump are the ones that are struggling the most. It may be tough to find other public companies willing to take them on at a price AOL Time Warner would desire, says Young, whose firm owns a small amount of AOL Time Warner stock.

Making matters more difficult is the fact that the AOL division remains under investigation by the Securities and Exchange Commission for questionable accounting practices. And the cable division, which was thought to be doing well, now faces scrutiny about how it accounted for fees it gets from cable companies.

Most cable operators amortize the revenue they get from fees that programmers pay to promote new channels over a period of several years. AOL, however, recognizes them as a lump-sum payment. Although there is nothing legally wrong with this type of accounting treatment, it could make investors more skeptical of the cable IPO. Plus, the $10.5 billion write-down for the cable division in the fourth quarter, Young says, was unexpected. These taints may make it harder to sell assets.

"You think the bad news is all in the stock price," said Young, "but then another cockroach seems to come out."

If strategic buyers fail to emerge, AOL Time Warner could consider selling pieces of the company to prominent private equity firms such as Texas Pacific, KKR, and Hicks Muse Tate & Furst, says Adam Adelman, senior technology analyst with Philippe Investment Management, a New York money management firm that owns a small amount of AOL Time Warner stock.

"AOL has to reduce the debt and get more nimble to be more competitive, so I definitely foresee the company starting to shrink a little bit," Adelman said. "The leveraged buyout firms could start to have an interest in working together with AOL to buy assets." Adelman said the AOL division and Warner Music could make sense as targets for private equity firms.

Leveraged buyouts (LBOs) involve the use of debt to purchase a company and take it private. The idea is to buy up the shares of a troubled business that still has a lot of cash flow, slash expenses so you're more than covering the debt payments, and then, when the company is on surer ground, take it public again.

In one recent example, British beverage firm Diageo agreed to sell the Burger King chain to a consortium of buyers led by private equity firm Texas Pacific.

One advantage of an LBO is that the assets would not wind up in the arms of a competing media firm. What's more, LBO firms often assist existing management with a buyout, says Greg Soukup, partner and co-director of Ernst & Young National Office West, which works with LBO firms.

"If you are looking to buy a division from a company, it is much easier to do the acquisition with current management involved," Soukup said.

And a sale of AOL Time Warner assets to a private equity firms isn't without precedent. In May 2002, the Blackstone Group agreed to acquire a majority interest in Columbia House, the music retailing joint venture of Warner Music and the music subsidiary of Sony.

But since LBO firms use debt to finance their purchases, leveraged buyouts work best with companies that have little debt to begin with. That's not AOL. Also, Young thinks that despite the pummeling the stock has taken, it still might not be cheap enough to attract LBO firms, which often invest in companies that are in or on the verge of bankruptcy.

"The LBO guys are vultures," said Young. "They may wait for the stock to go down even further."

The final strategy is one that would disappoint many on Wall Street -- at least in the short run: try to turn around the AOL service, squeeze more cash out of solidly performing businesses, and let the market and economy run their course.

"A do-nothing approach is dangerous because clearly there are a lot of people out there who want to see action," Young said.

Still, one analyst thinks the market's call for drastic measures is short-sighted, since some of the problems affecting the company are out of its control. Guzman & Co.'s David Joyce says that other than trying to sell non-core assets like the sports teams, AOL Time Warner should sit tight for a few quarters. (Joyce does not own shares of AOL, but Guzman & Co. has served as an underwriter for a company bond offering in the past 12 months.)

Joyce thinks there still is value in keeping AOL intact and that having a large online platform for the company's media assets makes sense. Even the decline in subscribers the service suffered last quarter -- the first in its history -- isn't cause to press the panic button. "AOL is trying to improve the general quality of its customers," Joyce said. "It needs to make subscribers more profitable, and you don't necessary get that from higher volume."