Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: KyrosL who wrote (34261)	9/19/1999 4:23:00 PM
From: KyrosL	Respond to of 45548

Insider sales at 3Com over the last 12 months. Here is a site that compares insider sales over the last 12 months to the revenues of a company -- this normalizes insider sales to the size of the company. It's interesting that for internet companies, insider sales are almost equal to the sales of these companies. For other technology companies the ratio is much much smaller. At the end of the page you can see insider sales of some other technology companies including our beloved(?) COMS. Guess what: insiders at Microsoft, Dell and Cisco sold a higher percentage than 3Com insiders did! It was surprising to me, given the vehemence with which some on this board are condemning last December's sales by 3Com insiders. softagon.com

To: KyrosL who wrote (34261)	9/20/1999 3:52:00 AM
From: Tim McGee	Read Replies (1) \| Respond to of 45548

Everyone here agrees that 3Com is undervalued. The huge disagreement is how to unlock that value we all think exists. I do not hate Ericb, but pointing the finger at him is a rational end towards unlocking value. I'm not sure how closely you followed COMS over the past few years but there have been a large number of credibility busting errors by mgmt. Since Ericb is the leader, he is responsible. He has lost credibility with shareholders and with key analysts (and WS in general - which IS important if we want the stock to go up). Eric promised a better future many times and did not follow thru. He even sold large amounts of stock soon after making positive comments - only to see devastating results shortly after. 3Com "turned the corner" several times only to encounter another corner. You can only cry wolf so many times. He presided over embarrassing accounting failures. He presided over a huge inventory debacle and a huge failure on due diligence in a merger. He has failed to construct a clear and concise vision for this company for year. Is it "edge" networking (which no one understands, or a PALM oriented company, or a LAN telephony company, or a Broadband supplier, or a wireless company. There has been no consistent vision just ride the latest horse. There is a straight-forward reason why Ericb is not the right person now when there is a track record that shows he had good performance at one time. Ericb was the right guy at the right time for 3Com to grow from where it was. There is nothing overly visionary about what he did. He made a business success out of a company that was founded by the inventor of ethernet (who was not an especially good businessperson). All of 3Com's (and Ericb's) success has come from the evolution of ethernet. People starting networking PCs together in LANs, then people wanted to connect these different LANs togther in the same building, then across different buildings, then across geographies, then add remote travelling users, then connect laptop users to the corp net, then people wanted faster networks, more capacity, etc etc etc. Everything flowed from the invention of ethernet and 3Com successfully met these challenges. Ericb did a fine job of piloting 3Com thru those days, we can give him some gold stars for having the company that invented ethernet become a successful ethernet company and networking equipment provider. All businesses come to a transition point where they must choose a path for the future. In order to grow, 3Com had to find a way to go beyond its ethernet roots. This is where mgmt failed miserably. Ericb chose to avoid key competition and cede a massive amount of business opportunity to a key competitor. CISCO gained the all important account control at the center of most networks. Now CISCO is successfully attacking many of 3Coms businesses. 3Com mgmt chose the wrong merger partners (although it ended up with some good products). 3Com's performance over the past 3 years has been awful. Zero revenue growth, zero earnings growth and zero growth on stock. 3 years is long time to give a CEO time to move its company toward a growth path. The verdict is in, Ericb failed at this during a time when the market grew dramatically. You would not make the same argument about an athlete, coach, frontline business manager or any other performance-based job (your argument boils down to saying "3 years ago they were good"). This just doesn't cut it. Perform, continue to perform or your gone. While 3Com still has good products and opportunities and may surprise us on the upside tues, they have been badly damaged. They may have some good battles left in them, but they have lost the war. Bottom line: Ericb was a good person to lead 3Com 6 years ago, maybe or maybe not a good choice for 3 years ago and definitely not for the future. Tim

To: KyrosL who wrote (34261)	9/20/1999 10:50:00 AM
From: The Phoenix	Read Replies (1) \| Respond to of 45548

Eric took over the company during 1990. 3Com stock increased from $2 at the end of 1990 to $70 at the end of 1996, an increase of 35 times during 6 years, or a compound growth rate of 80% a year. Anybody that can grow a company at this rate for this long can't be all bad. What do Eric's haters have to say about that? Is there something about this period I am missing? Yeah... go back and compare against the competition. Notwithstanding that we're all investing right now...In case you hadn't noticed it's not 1990. AAAaaand, if it was where would you put your money??? Not COMS! Maybe MSFT, or AOL, or DELL, or even CSCO, but not COMS. There is no question that the 1997 acquisition of USRX was a huge gamble that turned out to be a mistake Not to mention losing the NIC business to INTC, the router business to CSCO, and the RAS business to ASND/LU and CSCO. COMS management has continuously failed to take a winning strategy and ride it. That is why we all believe Eric is a loser. COMS has had so many shots a greatness and failed each time. What will be different now Kyros? OG

To: KyrosL who wrote (34261)	9/20/1999 11:05:00 PM
From: MGinPotomac	Read Replies (2) \| Respond to of 45548

Kyros -- You make a valiant attempt to put a positive spin on Mr. Benhamou's performance. However.... 1) Most of 3Com's growth during the early part of Mr. Benhamou's tenure was simply riding the industry's wave, as well as using acquisitions. Since the industry and 3Com have matured, the stock has either not moved at all (looking over the last 5 years), or has dropped dramatically (looking over the last 3 years). I would dare say that if Amazon.com is at around $20 in 5 years, one would be hard pressed to describe Mr. Bezos as a competent CEO. Having explosive growth in a networking company 7 years ago, like an internet company today, is due to the industry. A CEO's ability is best measured when pitted against others. In this respect, Mr. Benhamou has failed miserably. 2) With respect to the insider selling, if you wait a few more months, there will be none at all over the preceding 12 month period. While other companies have had insiders sell rising stock on a consistent basis, the 3Com insiders sold en masse in a narrow window... right before a precipitous drop in the share price. With the stock hovering around $25 for the last 6-7 months, there, not suprisingly, has been no insider selling. When comparing insider selling at 3Com to that at other companies, like MSFT or CSCO, it's misleading to ignore the context. If the insiders sold large blocks at ~$45 and the stock had risen 40% instead of falling 40%, 3Com shareholders wouldn't be feeling like we were mugged. Here's an interesting exercise: find another CEO of a tech company who still has his job after 5 years of a flat share price?