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

To: Tim McGee who wrote (36473)	11/21/1999 9:22:00 PM
From: Mang Cheng	Respond to of 45548

Tim, I have to admit I really don't grasp the essence of your argument. As Kyros said, which I agree, the 20% ipo shares are important to the success of Palm spinoff. Those potential 80-100 million shares creat a liquid market for the new issue. Those 20% of shares will be responsible for bringing Palm up to ridiculous level. If 100% of Palm shares are owned by coms holders, then there will be a long process for institutions to first accumulate enough shares before they would start to bid up the price. If we get 100% of palms an all coms holders just hang on to the Palms with their dear lifes, then there would even be no market for Palm. Institutions won't buy into a share with no liquidity. I'm not a tax expert, so the following is just my speculation thrown out for discussion, please comment : It should be quite clear that the six month holding period is set up by the SEC, otherwise the full amount would be taxed as stock-dividend at dividend rate. Now the cost base of Palm for us will be the ipo price. We'll pay capital gain on our sell-price minus ipo price. So I think the higher they set the ipo price the better it would be to us. Even in the event if we have to sell the palm shares below ipo price, we still have hugh net benefits. Mang