3Com Tells Analysts Its Shares Could Be Valued at $37 to $54
Boston, Aug. 2 (Bloomberg) -- 3Com Corp., the maker of computer-networking equipment that spun off Palm Inc. last week, said it told analysts today its shares could be valued at about $37 to $54 apiece, compared with $14.44 now.
The price stems from valuing its business operations at $25 to $42 a share and its non-operating assets, such as cash, investments and real estate, at $11.50, said 3Com spokeswoman Pamela Sklar. Shares of Santa Clara, California-based 3Com rose 3/4 to 14 7/16 on the Nasdaq Stock Market.
3Com is trying to boost its share price after the Palm spinoff reduced 3Com's market value by $18 billion. 3Com shareholders received that value in the form of shares of Palm, which has a market value of $22.1 billion. Earlier this year, 3Com said it would adjust employee stock options and buy back up to $1 billion of its shares in connection with the spinoff.
``They were just throwing out several figures, playing investment banker for the day,'' said Michael Jung, an associate analyst at SG Cowen. He attended the Boston meeting where 3Com executives made the remarks, later confirmed by Sklar. Jung and SG Cowen analyst Christin Armacost don't have a rating on 3Com.
Based on how the market values 3Com's rivals, the company said its line of business for network operators could have a market value of six to 10 times its $800 million in revenue. Its slower-growing division for corporate customers and consumers would be valued at three to five times the $2.8 billion in projected fiscal 2001 sales.
3Com has a market value of $5.18 billion.
Company executives are scheduled to give a similar presentation in a meeting with analysts tomorrow in New York.
Aug/02/2000 20:51 ET |
