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Technology Stocks : 3Com Corporation (COMS)
COMS 0.00130-23.5%Nov 7 11:47 AM EST
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To: Mang Cheng who wrote (43664)7/2/2000 12:05:17 PM
From: glennperkins  Read Replies (1) of 45548
 
Mang Chang,

Wanted your comments on a couple of items - Found out that Institutions hold about 55% of COMS outstanding stock, but only 1.7% of PALM outstanding stock. Put your institutional hat on and comment on the probabiliy that these institutions will choose to hold both stocks post distribution. I ask this questions because these institutions have the money managers to play the hedges on PALM, PALMV, COMS, COMSV in a more sophisticated manner than me or most individual investors. Since COMS has been basically flat over the past 5 years (institutional time window), do you think they will take the opportunity to cash out of COMS and place the money (lets say 55% of 350M shares @ 12 $$/share = $2.3B) in other investments that are growing? Do you think the market could support the sale of 190M 3COM shares? For what it is worth, I do think the institutions will hold onto PALM shares.

As I said, I am in this market for the short term, selling before the 11th (is that the correct date??) and hopefully taking my 35% profit (not bad for 6 weeks). I will watch the market over the next six weeks to see if either PALM (great growth story) holds price (eg if the institutions hold rather than sell .. keeping the float down), or if 3COM stays down within a couple of dollars of their book value making it a compelling (and inexpensive) value play.

A key to this puzzle could be institutional buying of PALM verus COMS over the next three days (would indicate theits stock they are really after).

Your insightful comments are appreciated.
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