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Technology Stocks : 3Com Corporation (COMS)

COMS 0.00130

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Nov 7 11:47 AM EST

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To: The Phoenix who wrote (39565)	2/21/2000 12:12:00 PM
From: The Phoenix	Read Replies (3) of 45548

I tried to edit that last post but my 15 minute window closed... Here let me explain. Let me first start with the disclaimer that I did not chose CSCO as a comparison - you did. 1. PALM is still a widget company and 95%+ of their revenues are coming from handhelds - not OS's not services (this was recently stated in a press release around the time the S1 came out). You should be clear about that. And while the PALM product is a good product and has market leadership it's still 1/16 the size of CSCO and would therefore be expected to be growing at a faster rate. COMS on the other hand is losing market share in every sector except cable modems. - PERIOD. The result of the two was demonstrated in the last quarterly report where COMS/PALM reported LOWER sequential revenues! Cisco on the other hand grew revenues 500M sequentially and by $1.5B quarter over quarter. No Comparison - 2. COMS has cash and investments - true but they are not spending this money wisely... They are overspending on G&A and underspending on R&D. They are not well managed and the cash is being held as an enticement for suitors because that's the only way any will touch COMS because of pooling issues. You know what... I 'm not going to do this again - I'm going to stop here. You keep making the same arguments and I keep sharing with you the facts. Last quarterly report COMS demonstrated how accurate my perspective was and even you were humbled then... Now you're back on the same rant. YOu will never get it. Mehrdad...the point is this is a PALM play investment.. ask around.. ask how many people are here to stick it out with COMS. If the answer is less than 50% then you have the answer to the real issue and the resulting valuation - SENTIMENT. And the sentiment is focused on the IPO.. Very few here are banking that COMS will turn around and many will be long gone by that point. If you plan on holding for the long haul you'd better hope that PALM rockets out the gate and continues to move up and to the right because after the IPO COMS will be trading in lock step with PALM. That all said if the market picks up where it left off on Friday don't be surprised to see the IPO pulled and COMS tank. The IPO is holding up big guy. Think about it - You'll get it. You can post PE comparisons, book values, etc all day long... but there is a reason for the discrepancies... CSCO is executing while COMS is not. In fact during the past few quarters COMS was abysmal.. and the only thing that saved this company during the past 6 months was the expectation of the IPO. Why do you think the IPO was announced in September and isn't being executed until now? Because EB was smart enough to know that without PALM COMS was a dead company - with negative revenue growth (come to think of it didn't that happen last quarter with PALM?). Mehrdad.. you just don't get the big picture.. and spraying your perpective on SI just further demonstrates your ingorance... Perhaps you should PM a few folks here and get their point of view... maybe then you'll get some input. BTW: Do you ever talk to anyone in the industry or other investors candidly... seek other input or guidance? You can't do this in a glass house my friend. SI is a good tool for differing points of view.. unless you ignore them. I've listened to you and your views remain ignorant of the data - the facts - the execution that's occuring in the industry. COMS is not executing - they have PALM IPO... I'm in for that.. but I have ZERO expectations about COMS return to any sort of glory without PALM. They just won't do it with Cable modems and DSL modems. NBX is fine for small offices but beyond that it's a joke. Nuf...... I'll stop here... but please Mehrdad. Please stop demonstrating your ignorance of the issues by posting data from the Yahoo finance pages (which I might add are not always accurate and don't provide any data on growth, market share, target market size, forcased growth, or any of a hundred other measures that investors find more critical in the booming tech market than simplistic measures such as cash, and book value. Fwiw companies like CSCO can raise more cash in a year than COMS could raise in a decade. CSCO puts that cash to work.... Cisco spent over $2B in R&D during the last 12 months or 13.7% of sales COMS spent less than $600M in R&D - less than 11% of sales. On the other hand (and this goes to managing a compnay) Cisco spent only 2.7% of sales on G&A COMS spent a whopping 4.2% on G&A! So, while COMS is not spending wisely and holding liquid assets CSCO is re-investing in technology and limiting expenses on G&A and non-revenue generating businesses. THis is certainly not exhaustive..there are many more data points like this if you'd take the time to look beyond the Yahoo Finanacial page. I should also point out that attempting to compare COMS to CSCO (which you continue to do - I don't know why since most here agree that there is no comparison) is a losing effort. There is no comparison. Perhaps you should pick some low hanging fruit for comparisons - like CS.. OG

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