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

To: XBrit who wrote (43395)	6/3/2000 4:53:00 PM
From: Mang Cheng	Read Replies (2) \| Respond to of 45548

Julius, it appears to me that the coms employee option thing only affects coms and it doesn't affect the distribution of Palm to us. coms shareholders will be getting 1.5 Palm on record date. The total number of shares coms ends up with after the distribution is only coms' problem in the future - it doesn't affect Palm. Your statement: "because that way the makeup in their unvested options will be a maximum number of new COMS shares." doesn't seem to be totally correct since the ratio is determined with just one day difference in coms before distribution /coms after distribution share prices. Unless Palm remains very high right before distribution then coms employees will get more of their coms shares but in which case if Palm remains high then we'll all be laughing to the bank anyway and who cares how many potential coms shares will be there the next morning. These are very complicated issues and more discussion is always good. At this time I am much more concern about getting Palm back up to around $38. Rimm is selling at price-to-sales ratio of 32 and Palm is only selling at around 15. At $38, the psr for palm is only 22. Mang

To: XBrit who wrote (43395)	6/4/2000 8:18:00 AM
From: David E. Taylor	Respond to of 45548

Julius: Well, well, someone even more skeptical than I about EB & Co.!! Seriously, though, I can't see how COMS management can be affecting the present $7 ex-distribution price of COMS, and there's really no incentive for them to begin any buy back until COMSv starts trading on 7/7. If it's still $7 then, they have enough cash authorized to buy back most of the potential dilution, around 140 million shares. OTOH a buy back of COMSv of that magnitude would surely mean the $7 wouldn't last for long. And as I pointed out in my earlier post on this, the unexercisable (unvested) employee options don't seem to figure in the "fully diluted EPS" which is presented in the 10Q's and 10K's, only the exercisable options. But I guess they'd still be hanging out there as potential future dilution. Still seems to me that the ex-distribution value of COMS has to increase over the next few weeks. The market has to give at least book value to COMS plus something for the businesses, and no matter how you crunch the numbers you come with at least $15/share, and more reasonably, $20/share. We'll see. David T.