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

To: fmikehugo who wrote (43696)	7/5/2000 9:23:29 AM
From: David E. Taylor	Read Replies (2) \| Respond to of 45548

Mike: Depends on where PALM sits on 7/27. If it's no higher than the current $32-$34, I doubt there will be large scale selling. My reasoning is that I believe a significant fraction of current COMS shareholders (institutional and individual) regard COMS as the cheapest way to get PALM, and not as a long term investment in COMS. With the guidance of $2 billion revenues for FY 2001 (which is likely to prove conservative), 100%+ Y/Y growth rate, and using 10-12 times forward sales, PALM is worth (IMO) $36-$42/share right now. So I think most shareholders will hang on at the present $32-$34 level, because there's little downside and a lot of potential upside. OTOH, if PALM spikes to $40+ over the next few weeks (which I think is quite likely between 7/20 and 8/7) there will undoubtedly be some additional profit taking on PALM, which would certainly hold the stock back or drive it down somewhat. If it gets down to $32-$34, I'm sure there will be a lot of buyers, just as there were last week when 32 million shares changed hands in just 2 days. IMO, that high volume probably washed out a lot of the short term profit takers on PALM, and the $32-$34 is a floor. For my own part, I'm not selling PALM under $40. If it spikes short term over that level I may sell, but I'd buy back at some point because I think PALM will be a "must-own" stock for the next few years. I wouldn't be surprised to see PALM at $100+ this time next year. We might get some indication of how things are going to move this Friday, when COMS shareholders will be able to both sell their underlying COMS as COMSv, or sell their right to PALM by selling PALMv. OTOH, your post indicates that the availability of these two trading vehicles is not particularly known/understood, even by the brokerage community! So nothing much may happen until 7/27. That's my rather wishy washy on the fence take as of right now. Probably not much help. David T.