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

To: Elmo Gregory who wrote (32618)	7/25/1999 9:14:00 PM
From: E_K_S	Read Replies (2) \| Respond to of 45548

Hi Elmo - I saw the option activity for the Jan 20 2000(ZTHAP.O) offered at $9 3/4 with a volume of 1075 contracts. There is "fundamental" value in 3COM. However, I believe the company told Wall Street that the next two quarters would be at a lower growth rate and investors expectations need to be adjusted accordingly. Perhaps this is the reason for the sell off in the last week. While the rest of the market is at all time highs, IMO 3COMS will be taken down as the market adjusts valuations of the other networking stocks (i.e. CSCO). My last holdings of 3COM got called away at $27 1/2 for July and I am looking at establishing a new position in a networking company....CSCO has been on my radar screen but the valuation at 70 PE is just too expensive. I guess the question is do we buy value or pay the price for performance. I am going to wait a few months but may take a position in those 3COM leaps if the price (and the market) signals to me a "buy". Just what leap price and period were you looking at? Typically, I like to sell naked PUTs but if the LEAP is priced cheap enough, it might be a good way to invest in 3COM's long term potential. I know that lots of money could have been made by buying the SUNW 60 Leaps last year for $6.00. Current value is $140..or a gain of $80 per contract (a 13 bagger!). SUNW went from $40 to $140 in 18 months. A similar run for 3COMs would be $20 to $70. Could this occur in the next 17 months for 3COMs? I guess I would like to see a final shake out for 3COM of both new and old shareholders (possibly to the teens??) then those Jan 2001 $30's or $40's might just be a steal. I am just concerned about the overall valuation of the Tech sector and would like to see an additional 10% correction and panic sell off (like Oct. 1998) that will provide a huge buying opportunity for undervalued companies like 3Coms. EKS P.S. Also I am a bit worried about the voluntary termination of several engineers who in droves have jumped ship to sign up with Juniper Communications. My sources tell me that there were as many as 20 engineers who left the San Jose facility in the first two weeks of June to join Juniper. The stock option sign-up bonus at Juniper were quite attractive.