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

To: jackhach who wrote (43200)	5/11/2000 5:28:00 PM
From: David E. Taylor	Read Replies (1) \| Respond to of 45548

JH: Yes - net reduction of shares outstanding will still occur if they use the entire $1 billion, but the overall effect on EPS will be reduced by the 14 million shares they'll need to buy back just to restore the status quo. My guess is they'll probably buy back the 14 million fairly quickly to prop up the EPS, but will they do that ahead of the 7/11/00 record date? With the net buyback cost of the 14 million shares say around $15 (current $42.5 less the $27.5 or so received from employees for their options), maybe. But the same cash will clearly buy more shares later. OTOH, EB and Co. may want to get their hands on more PALM shares via the COMS options they've exercised, in which case they'll have to buy back before 7/11 to keep the distribution ratio up. Hmmm. That would effectively transfer some of 3Com's cash hoard into COMS shareholder pockets, their own included (to EB supporters - just kidding). The June earnings report will maybe tell us something. David T.