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

To: Mang Cheng who wrote (39406)	2/16/2000 4:24:00 PM
From: Tumbleweed	Read Replies (1) \| Respond to of 45548

3Com gains with Palm spin-off around corner By Dawn Kawamoto and Wylie Wong Staff Writers, CNET News.com February 16, 2000, 11:20 a.m. PT update 3Com's shares today hit a new 52-week high as the networking company prepares to spin off its popular Palm Computing unit in two weeks. Shares of 3Com jumped $4.56, or 6.5 percent, to $74.56 in afternoon trading of 12.1 million. Earlier, shares hit a new high of $75.88. 3Com has grappled with a sinking stock price in light of increased competition in the networking market. A series of strategic shifts have also raised questions in the analyst community about the company's staying power. Despite the recent troubles, 3Com is now edging closer to a four-year high of $81.38, last hit December 1996. In December, Palm filed plans to raise upward of $368 million in an IPO. When 3Com first announced its plans before filing papers with the Securities and Exchange Commission, its shares were mired in the $27 range. Since then, the stock has jumped 178 percent. Sutro & Co. analyst Patrick Houghton said 3Com's stock is rising because 3Com shareholders welcome the opportunity to own shares in both 3Com and Palm. 3Com will initially retain a 93 percent stake in the company, though it plans to later distribute Palm shares to 3Com investors. "A lot of investors are probably not buying it on the strength of the existing networking business. They're buying it for the Palm business," Houghton said. "They're probably not going to be on the allocation list for that small amount of shares being distributed now." Palm expects to begin trading in early March under the ticker "PALM." When Palm spins off from 3Com, the company will have an initial market value of $9.1 billion, based on the high-end of its $14 to $16 price range and 570 million shares that will be outstanding. 3Com has a market capitalization of $25.8 billion. 3Com plans to transfer its remaining shares of Palm within six months of the public offering. Until then, the networking firm's market value will be closely tied to Palm, Houghton said. "For shareholders who bought the stock at $20, they're taking a victory lap," he added.

To: Mang Cheng who wrote (39406)	2/16/2000 4:40:00 PM
From: rabbit	Read Replies (2) \| Respond to of 45548

Mang, First of all, I am surprised that you can buy options on margin. Secondly, initial margin is normally 50%, house call margin is specific to each brokerage, usually around 70%. Meaning COMS has to be at $53.5 when you get the house call. Possible? yes, but unlikely. Thirdly, when COMS price drops, your leap price drops too. You can get margin call if you buy them on margin. Last but not the least, buying is for leverage, controlling large numbers of shares with small sum of capital. That being the goal, you should buy March or April options. I don't expect you to follow my advice. It is your money.

To: Mang Cheng who wrote (39406)	2/16/2000 4:58:00 PM
From: sunfish	Read Replies (1) \| Respond to of 45548

rabbit & mang- You left out one strategy. Scenario 3. Buy the stock only with the cash you have on hand. Advantages: pay no margin interest, get no margin calls, pay no premiums, and have no time limits on holding or selling. My basis in COMS is $23.56 per share, all purchased "the old fashioned way" since 1997 (after the COMS crash). Good luck to everyone whatever strategy you use. I'll be tempted to sell some of my position if we reach 100. I'm curious as to when other long term holders of COMS may take profits. Anyone whose owned COMS for more than a year care to give their price targets for profit taking? sunfish