AOL CEO Tim Armstrong and his management team are in the early stages of reviewing takeover bids from private equity firms, the New York Post reports.

"The early stage discussions have focused on a price that might entice AOL’s management to consider such a transaction," sources tell the paper.

The company has been telling reporters there is no deal.

“Our strategy at AOL hasn’t changed and we are moving faster than ever on executing against it.”

We've also heard from a source close to Armstrong that the company is shopping some of its assets.

Rumors have long swirled about Mapquest. We wonder if the Huffington Post could end up independent.

AOL private equity talk started last week, when AdWeek reported that the company retained the services of law firm Wachtell, Lipton, Rosen & Katz, as well as investment bank Allen & Co.

Since then, AOL's stock price has climbed nearly 50%.

AOL is in this position because it went through a sharp selloff following its second quarter earnings call earlier this month.

That happened because shareholders finally got sick of hearing about a turnaround that hadn't started yet.

The price got so low, that on August 18, we published a post titled: "Buy AOL Right Now, And Get All Of Your Money Back In Three Years"

It read like this:

Now that AOL stock has tanked in recent days, Bloombergspeculates that private equity firms are circling like a pack of sharks.

The reason: because AOL's subscriber business still throws off a whole lot of cash, any PE firm that bought AOL at a standard 41% premium right now would have their entire purchase paid back in EBIDTA by the end of 2013.

“Everything after that is pure profit,” Sameet Sinha, an analyst at B. Riley in San Francisco, told Bloomberg.

The problem is that $1.5 billion is just about all the access business is good for, as it remains in a very serious decline.

Between now and then, AOL or its new owners would have to figure out a new line of business that could actually generate that "pure profit" Sinha is talking about.

So far, the big bets are the Huffington Post (smart) and Patch (dumb).

If they don't pay off – "pure profit" will actually be "filthy losses."