3Com Corporation (COMS) Message Board

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Technology Stocks : 3Com Corporation (COMS)

COMS 0.00160

0.0%

Nov 26 9:30 AM EST

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To: Amir Desai who started this subject	2/21/2001 11:27:43 PM
From: Mehrdad Arya	Read Replies (1) of 45548

Finally Cisco hit $25!!!!!!! All the fuzzy math couldn't hide its' mortality. All the hired spin masters did a wonderful job in the latter years but the facts belied the truth about CSCO's woes. Unless they restructure the company forthwith their stock is headed into the low teens. Predicated on fundamentals the company is still way over priced, especially when you consider the future earnings forecasts by its' suppliers and partners. It was so obvious what was going to happen, but the $1 billion question was when. I still think 3Com at $9 ($3 Billion) is a better buy than Cisco at $25 ($181 Billion). Is Cisco worth a 60 multiple of 3Com? I think not, by any fundamental comparison Cisco pails to 3Com. For 3Com you get a Book Value of $11/share while Cisco only gives you $3.8/share. 3Com has more Patents than any other networking company around the world and that includes Cisco. 3Com's P/S, P/B are both a fraction of 1 while Cisco is trading at a multiple of 8 and 6.5 respectively. Now tell me how Cisco can justify these high multiples when according to a respected accountant their earnings have been relatively flat for the latter 18 months. With flat earnings they were able to use accounting wizardry to show perpetual growth. With slower growth slated for the future it is going to be interesting to see their new accounting calculus. All the fancy math in the world will do little to hide Cisco's looming problems. Remember my prediction of $25, well now I am surmising $15. The main reason is that they are losing lots of good talent and with their stock price in the doldrums their stock options won't be as cogent as they have been in the past.

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