3Com Corporation (COMS) Message Board

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Technology Stocks : 3Com Corporation (COMS)

COMS 0.00130

-18.8%

Nov 7 11:47 AM EST

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To: JDGarza who wrote (35558)	10/16/1999 10:16:00 AM
From: The Phoenix	Read Replies (1) of 45548

JDGarza, Yes I guess that post could be considered positive. I have always agreed that COMS presents little downside risk...which is great for these kinds of markets. So, I'm not sure I'd consider the muted movement in a very down market an ignition point. The ignition should have happened with all the PALM announcements during the past week but apparently (I'm only guessing) investors are going to wait until next earnings report. Investing in COMS for saftey however is only one side of the investment equation. If for one don't invest purely for saftey. My goal of investing is to make a buck or two. COMS valuation needs to grow.... and the bulls here have an underlying assumption that COMS is making all the right moves to put it on a glide path to "ballistic" success...whatever that means. No one has really defined this for me. I believe that COMS is on the glide path to a return to mediocrity which in the absence of the PALM IPO I would estimate a valuation of $60 within 12 months (4 times revenues) and a forward PE of about 40 (perhaps a little high...but in this market...who knows). Of course this assumes that large investors return to tier two companies in this sector..and that is an assumption which hasn't beared much fruit recently. Value plays are not that exciting I guess. Still at $60 that represents a nice double... so long as COMS can execute on their trajectory to mediocrity. I guess being undervauled can be a good thing. :-) Of course if EB blows it again...well..you can do that math yourself. Now, this all assumes no PALM IPO and assumes COMS valuation and success with PALM as a single going concern. The IPO market is nuts! Who knows what PALM will be worth - I certainly haven't a clue...and wouldn't hazzard to guess. But if the IPO leverages the momentem that they currently have it could be a major windfall. Of course COMS without PALM is a vastly different company but as a shareholder of both you probably come out a net plus with the IPO...that is I do believe the IPO will create value for shareholders which is what I argued before COMS even announced the spin-off of PALM. At the same time I believe their methodology for the spin-off is flawed. They should turn shares over to COMS holders on the day of the IPO. WHy didn't they - to keep the outstanding shares tight and kick the price up. So what - when COMS shareholders get their shares the outstanding shares goes up and the price tanks.... Same difference except you have to wait 6 months...or whatever the timing is to get your PALM shares...in a market that at least for the moment...and who knows for how long....is uncertain. Why are they doing this? To hand on to COMS shareholders and buoy the COMS stock price up (limit sellers). What will happen when COMS shareholders get PALM stock??? Better be first in line ;) OG

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