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Technology Stocks : Broadcom (BRCM) -- Ignore unavailable to you. Want to Upgrade?

To: Stoctrash who wrote (6036)	8/20/2001 9:52:32 PM
From: Ibexx	Read Replies (2) \| Respond to of 6531

Fred, Thanks for bring this old news to our attention. I was well aware of it, the lawsuit as well as an analysis of the situation by Morgan Stanley. Stock reacted POSITIVELY today. Below is MSDW commentary on this subject. ___ Broadcom (BRCM-$41-O-V) 3Com Lawsuit Mark Edelstone 3Com (COMS-$5-N-V, covered by C. Stix) has filed a lawsuit against BRCM over a dispute regarding the 2 companies' Gigabit Ethernet partnership. As part of their partnership announced earlier this year, BRCM acquired COMS warrants that were valued at $21MM. Based on the filing of the lawsuit, it appears that BRCM was late in making interest payments associated with the note payable for the warrant. While BRCM was late in making their scheduled interest payment to COMS, we believe that they are now current, and the delay in making the payment can be attributed to ongoing discussions that BRCM and COMS have had on the status of the partnership. The principle payments are scheduled to begin in Oct, and the note is scheduled to be paid off at the end of next year. Although the amount of money involved in the dispute is not material to BRCM, we believe that COMS's decision to file a lawsuit clearly suggests that the relationship between the 2 companies has become strained. While COMS used to represent a large portion of BRCM's revenue, we believe that they currently account for well under 10% of sales, and their network adapter card business is weak. Although near-term business conditions remain challenging, we believe that BRCM is tracking to our expectations for flat Q/Q revenue in C3Q, followed by a resumption of growth in C4Q. Based on our analysis, we believe that server demand has picked up and networking demand is bouncing along the bottom. While we believe that BRCM's settop box business is stable, Scientific Atlanta (SFA-$25-N-V, covered by G. Lieberman) (a relatively small customer form BRCM) announced yesterday that demand for their settop boxes has become less certain. Ibexx