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

To: Captain Jack who wrote (33763)	9/9/1999 11:12:00 PM
From: Balaton	Respond to of 45548

Com Up -3: Co. Can't Explain Stock-Price Rise >COMS Thursday, September 9, 1999 04:53 PM Fueled by consolidation in the data networking sector, 3Com has been a perennial on the list of potential takeover candidates for some time, with companies from Lucent Technologies Inc. (LU) to Nokia Corp. (NOK) mentioned as possible suitors. Despite the persistent rumors, industry observers pointed out that 3Com's diverse businesses make it a difficult acquisition target for any one buyer. Besides providing broad-based local area network and wide area network systems, 3Com offers customers a wide range of networking solutions that includes switches, hubs, remote access systems, routers, network management software, Networking Interface Cards and modems. It also has a Palm Computing unit that produces the popular PalmPilot electronic organizer. In addition to the takeover rumors, which had been posted on several Web sites, trading sources also point to speculation the company would spin off its Palm Computing and networking units, leaving the NIC and modems business. Although the Palm Computing unit accounts for roughly 10% of the company's fiscal 1999 revenue, it is one of 3Com's fastest-growing operations - driven largely by the PalmPilot's popularity as the gadget du jour among yuppies and techies alike. On the other hand, the NICs and modems business accounts for about 40% of 3Com's revenue but has been under some pressure, industry observers say, because of changing customer demands and usage. For example, modems, which previously could be acquired separately, are increasingly being built into computers. "There is a lot of untapped value in the company," said Sanford C. Bernstein & Co. analyst Paul Sagawa. "The key to unlocking its value is for management to take the first step and separate the company into more digestible pieces." Such sentiment, however, is nothing new for the company and industry observers said the company has been pressed to consider spinning off its units. A 3Com spokesman said the company has no explanation for Thursday's stock-price movement. He declined comment on the market rumors. A Lucent spokesman declined comment, citing company policy, while Nokia officials weren't immediately available. On Thursday, 3Com closed up 2 1/4, or 8.8%, to 27 15/16 on volume of 7.8 million shares, compared to daily average volume of 4.8 million. -Kopin Tan; 201-938-2202; kopin.tan@dowjones.com