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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: Scott Heaton who wrote (37124)12/15/1999 5:10:00 PM
From: Mehrdad Arya  Read Replies (1) of 45548
 
Scott, I liked your analysis but I would do my calculations based on an estimate closer to what you might surmise Palms revenues to be in February, the end of the 3rd quarter. I suspect we would have a revenue run rate of approx. $1 Billion. Another factor should also be noted, the Palm is growing much faster than Psion. So lets be conservative and assume the Palm has 3 times the revenues, that would give the Palm a $10 Billion market cap., now since Palm dominates the PDA OS market with an approx. 65% market share as to Psions 13%, you can multiply by a factor of 5x, this would leave us with a market cap of $15+ Billion. With an extra 50% factor to the Palm for its' leadership role we would have approx. $23 Billion.

With the remaining 3Com predicated on your 1.5 x Revenues, that would leave us with $8 Billion. If you add cash and investments that would be another $4 Billion.

The sum total of its' parts would be $23 + $12 = $35 Billion dollars, this translates into $101/Share.

All this is predicated on 3Com having no top line growth, which I doubt will be the case. For this reason I estimate the stock's fair market value to be $120 a share. This will manifest itself by the latter part of June or July.
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