3Com Stock Rises Amid Takeover
Rumors
(04/23/99, 5:57 p.m. ET)
By Kimberly Caisse, Computer Reseller News
3Com stock received a boost Friday amid
speculation that it is ripe for a takeover by
any company interested in gaining a
foothold in the data-communications
market.
Just prior to the market's close, 3Com shares were up
18.5 percent to 26 7/16. However, that is down
considerably from the company's 52-week high of 51
1/8 and about 6 more than its 52-week low.
It is the third Friday in a row that 3Com's stock price
increased because of takeover rumors.
Potential suitors mentioned in reports circling Wall
Street include European cellular-phone companies
Nokia and Ericsson, telecom-equipment maker Lucent
Technologies, Apple Computer, and Siemens, a
long-standing 3Com partner.
3Com, based in Santa Clara, Calif., declined to
comment.
3Com is trying to improve itself and Wall Street's
opinion of the company, said Craig Johnson, principal
at The PITA Group, in Portland, Ore.
"A week ago 3Com finally took action to cordon off
their [network interface card]and modem business,"
Johnson said. "They seem to be taking action to
distance themselves from their low-margin business."
3Com's stock fell in February following the company's
preannouncement that its third quarter earnings would
be lower than expected.
"The rumors are very credible," said Jim Slaby, an
analyst at Giga Information Group, in Cambridge,
Mass. "I think now is the right time to do it."
Overall, 3Com is a strong networking company,
analysts said.
The problem is it has disparate products aimed at
disparate markets, Slaby said, pointing to the market
differences between the Palm Computing handhelds,
switches, remote-access servers, and client-access
products.
|
