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

To: Tim McGee who wrote (39468)	2/17/2000 9:31:00 PM
From: Captain Jack	Read Replies (2) \| Respond to of 45548

Tim -- you are correct but may overvalue coms alone just a little,,,

To: Tim McGee who wrote (39468)	2/17/2000 10:25:00 PM
From: Mehrdad Arya	Read Replies (2) \| Respond to of 45548

Tim, I have a feeling that the company has reinvented itself and will have definitely turned itself around by the time the spin off is complete. According to you the company is only worth $20 a share, well if that was correct that leave us with a market cap of $6.8 billion. Now how in God great name is that possible if their liquid assets are more than $6 billion dollars. Lets see if I am exaggerating: $2.5 billion in cash $2.6 billion in investments [{JNPR(5%) + AETH(13%)} = $43 billion Market Cap.] $800 million in receivables More patents than Cisco % of the Palm Investments in FusionOne, No Wires Needed and many other upstarts. IBM doesn't think their patents are useless nor do a lot of competitors that are willing to pay lofty prices for them. 3Com sans Palm has a conservative market value of ($16B)/342mill = $47 a share. This is extremely conservative. Now if their Emerging market continue to perform at their current rates of 47% Q on Q, the value will be way north of $47.

To: Tim McGee who wrote (39468)	2/18/2000 1:00:00 AM
From: Mang Cheng	Respond to of 45548

<your estimate for COMS minus PALM to $20> Tim, that's way too low an estimate for coms-alone price. Cabletron is not particularly a blockbuster networking company but it's now $36 and has a psr of 4.5. coms used to double the price of cs so I can say coms without Palm will be north of $40 at this very moment. You have to notice that most other hardware stocks like intel, mot, cisco are doing well, and companies like coms and cs always tack along these companies - albeit at much lower valuations. But for my own post-Palm calculations, I only use a $30 coms for baseline to be conservative. Mang

To: Tim McGee who wrote (39468)	2/20/2000 2:59:00 PM
From: David E. Taylor	Respond to of 45548

Tim: I've been away a couple of days, just catching up. My thoughts on COMS sans PALM valuation were in a post I made about a week ago: Message 12857354 Believe me, I'm no big fan of COMS or EB, I got stuck with largish positions in COMS both in Oct-Dec of 1997 (bought at 45+, bailed at 35) when I refused to acknowledge the warning signs because I'd made decent profits on COMS over that summer; and again in Feb - March 1999 (bought at 34 bailed at 25) when I again failed to see the warning signs. While I managed to make up the losses by trading much smaller COMS positions several times, after a ton of work I was just about even. So I'm the last to be bullish on the prospects for COMS after the PALM spin off. At least this time I'll make some big gains, since I bought all my COMS starting around 25 last fall and the last at around 50 on 1/31. But I think even a cautious appraisal of COMS places a "fair" value on the stock at about 35. That's about 2X revenues, and a P/E of about 25 on COMS, plus about $8 for the cash and investments (at cost, not at Mehrdad's present value). So, absent PALM, would I buy COMS at 35? No way, 35 has been my sell point for over a year. But at your (and Gary's) 20, would I be a buyer? For a trade to around 35, sure. Anything over 35 would need some solid COMS performance for a couple of Q's or a buyout prospect, where I think even the present COMS would fetch at least 45. But my only present point in coming up with a "value" for COMS is to get an idea of what the market is willing to pay now to get a piece of PALM later. So my 35 for COMS is a kind of middle-of-the-road value between the pessimists and optimists for COMS future. With COMS at 70, that puts the present going price for PALM at about 23. Your 20 for COMS puts PALM at 33. And Mehrdad's glowing valuation for COMS means he thinks he's getting PALM for free! I think there's a darned good chance we'll see a re-pricing of PALM by Goldman et al this week sometime that will hike COMS again prior to the IPO. If not, we'll probably not see much more than a 5-10 gain before 3/2. David T.