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Technology Stocks : 3Com Corporation (COMS) -- Ignore unavailable to you. Want to Upgrade?

To: JDGarza who wrote (32137)	6/24/1999 11:17:00 PM
From: Alan Sherman	Respond to of 45548

If Palm is growing 50% a year, then sales should hit $1 billion by next summer. Assuming a valuation of the Palm unit of 10x sales (typical for a fast growing company), at today's share price one is buying the rest of 3Com for nothing. That includes the mature but still profitable desktop NIC, analog modem and hub businesses, the moderately growing mobile NIC's, switches and RAC's, and the fast growing cable/DSL modem, wireless, VoIP and LAN telephony businesses. You can also throw in the new software unit, which likely will see accelerating growth. It seems that investors are assigning a negative valuation to the mature business lines even though they are still profitable. 3Com obviously is not interested in spinning off Palm, but why not create a tracking stock like Quantum is doing with its digital tape drive business? Can anyone provide insight into what is required to create a tracking stock for a particular unit of a company? Alan