"Among other things, plaintiffs claim that defendants artificially inflated the price of 3Com's common stock by making a series of false and misleading statements about 3Com's acquisition of U.S. Robotics Corp., 3Com's success in integrating U.S. Robotics operation into 3Com's following the acquisition, the state of 3Com's ''channel inventories,'' and efforts to reduce the amount of channel inventory.
As a result of defendants' misrepresentations and omissions, 3Com's stock traded as high as $59 11/16 per share during the Class Period, before plummeting to below $30 per share when the truth was finally revealed."
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Sept. 23rd: ""There are three key messages," said Eric Benhamou, 3Com chairman and chief executive officer. "Our merger is on track and off to a great start...the industry's growth is playing out as we anticipated...and we're starting the second half of our fiscal year with an exciting product-cycle."
3Com has jumped several hurdles in bringing about its merger, he said, noting the company has completed its efforts to meld the sales force, branding, manufacturing, office arrangements, and distribution strategies of the two companies.
"We're starting to see the benefits both internally and externally in the marketplace," Benhamou said."
Dec. 2nd: The company said it has reduced the inventory level at its channel partners. It also has revised its inventory practices across many levels of its business--including its partners, business units, and worldwide divisions--in order to aid predictability and streamline sales.
3Com expects the new plan to result in a reduction of inventory levels in the channels by three to five weeks. The company said the changes should help it adjust more quickly to shifts in market demand and business conditions.
The changes will impact financial results for the second quarter of fiscal 1998, which ended November 30. Revenue is expected to be $1.22 billion to $1.24 billion. For the same quarter a year ago, the company reported revenue of $820 million, and in the first quarter of fiscal 1998, the company reported revenue of $1.6 billion. 3Com said revenue in that range is expected to produce a "slight profit for the quarter."
Dec. 3rd: Janice Roberts, 3Com's senior vice president of global marketing and business development, said: "The modem business is still strong, but the bigger market opportunity has not happened because of the standard [delay] ." Despite the sluggish sales of modems, Roberts said 3Com is not planning on selling any parts of the former U.S. Robotics business.
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Re * How long have you followed 3Com management.
I've followed them since a company I held stock in sold themselves to 3Com earlier this year. This has to do with what? Were you going to send me an anniversary card?
Re *During the September conference call, they said they have little visibility of what's in the channel, especially internationally, and that concerns them....and.....[a] And the company made it widely known that they were trying to lower channel inventories in the quarter,..
Would you make up your mind already? Did they know or did they not?
and investor relations let anyone who called know that well over half the business/revenues had to get accomplished in November in order for them to reach consensus estimates. Thus, all the downward revisions in November. They hid nothing.
I see. And did they explain to you that trying to lower channel inventories in the quarter may involve reducing shipments? Did they explain that when you combine points [a] and above, the most likely result would be catastrophic, resulting in "slight profits"?
* Uhmm, earnings are not going to barely meet revised estimates.
You're lost, I'm afraid. I was referring to the prior quarter ending Aug 31. And "missing the boat" referred to the quarter ending Nov. 30th.
*Why do you doubt this scenario?
I don't doubt it. I said the stock price is already priced to reflect the rosiest senarios. |
