*AV*--Maybe I have misled you but the following articles are for your perusal:
Monday December 8, 10:44 am Eastern Time
Company Press Release
SOURCE: Barrack, Rodos & Bacine
Shareholder Files Suit Against 3COM Corporation (COMS) and Certain Officers and Directors Alleging Material Misstatements
PHILADELPHIA, Dec. 8 /PRNewswire/ -- Counsel for Class Plaintiffs, Barrack, Rodos & Bacine, today issued the following:
A class action has been commenced in the United States District Court for the Northern District of California on behalf of purchasers of 3COM Corporation (''3COM'') (Nasdaq: COMS - news) common stock from May 19, 1997, to November 6, 1997 (the ''Class Period'').
The Complaint alleges that defendants made false and misleading statements, inter alia, about 3COM's acquisition of U.S. Robotics, the Company's success in integrating U.S. Robotics' operations into 3COM's, and the state of 3COM's inventories and the progress being made to reduce them. The complaint also alleges that 3COM falsified its first quarter 1998 financial results for the period ending August 31, 1997, by artificially inflating 3COM's revenues and earnings per share. In truth, 3COM's acquisition of U.S. Robotics was a disaster in that U.S. Robotics had accumulated millions of dollars of excessive inventories which could be sold only at very low prices; there were serious problems in integrating U.S. Robotics' operations with 3COM's; and 3COM was unable to reduce its inventories. 3COM's earnings report for the first quarter of 1998 improperly recognized revenue and failed to take required writedowns. The purpose for these misstatements was to artificially inflate the price of 3COM stock from $37 to a high of more than $59 so that 3COM insiders could sell more than 2.6 million shares of the stock for more than $130 million before the true condition of 3COM would be discovered by investors. When the truth about 3COM began to be revealed in November 1997, 3COM stock fell from $45 to $28.50, a 37% decline in just six trading days.
3Com Says Its Standards-Based Modems Possibly Out In 1Q 1998 12/08/97
Newsbytes, Monday, December 08, 1997 at 18:55
SKOKIE, ILLINOIS, U.S.A., 1997 DEC 8 (NB) -- REPEAT/ By Bob Woods,
Newsbytes. Following a compromise at this week's International
Telecommunications Union 56 kilobits per second (Kbps) standards
talks, 3Com [NASDAQ:COMS] said it could have standards-based products
in the marketplace by the first quarter of 1998. 3Com officials told
Newsbytes Friday afternoon that it and Motorola [NYSE:MOT] are also
working on guidelines for the formation of the 56Kbps standard, along
with Lucent Technologies [NYSE:LU] and Rockwell International
[NYSE:ROK].
Earlier Friday, Newsbytes covered announcements by Lucent and
Rockwell announcing the "declaration of consensus" regarding an
eventual 56Kbps standard, and that both companies supported the
declaration. But Rockwell said that the decision "represents an
overwhelming endorsement of K56flex-supported technologies," while
Lucent said that "the standard will contain an equitable
mix of K56flex and x2, the two competing PCM (pulse code modulation)
modem technologies."
K56flex is a Rockwell/Lucent technology, while x2 comes from 3Com,
Newsbytes notes. Both technologies are proprietary, and do not
communicate with one another.
3Com officials acknowledged to Newsbytes Friday afternoon that it
came to a consensus agreement with the Lucent/Rockwell coalition
regarding the 56Kbps standard.
3Com Vice President of Marketing Neil Clemmons told Newsbytes that
some final compromises were reached at the meeting. While the main
technology was approved, 3Com and Motorola voted yes on two technical
initiatives: one involving the efficient transmission of data, and
the other regarding "optimizing (data transmission) performance under
less than ideal phone conditions."
Clemmons said that while the vote was not unanimous on these two issues,
"the vote was positive towards reaching consensus that this
compromise made sense, and we should move forward."
"(3Com) voted in favor of this," Clemmons said. But he could not reveal
how other companies voted, because the session was closed.
If all goes according to plan, the standards agreed upon during
this week's meetings will be adopted in late January, with a vote
by countries around the world to occur next September.
Clemmons also said a 3Com 56Kbps standards-based modem could hit
retailers' shelves in the first quarter of next year. Such lead time
on a standard is not uncommon -- Clemmons said that when the V.34
standard for 28.8Kbps modems were accepted worldwide, recent 3Com
acquisition US Robotics' V.34 modems were already in the market for
nine months.
Reported By Newsbytes News Network: newsbytes.com .
(19971208/Press Contacts: Sara Powers, 3Com, 847-982-5066)
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3Com 56K ITU Deal Shadowed By Class Action Lawsuit 12/08/97
Newsbytes, Monday, December 08, 1997 at 18:55
SANTA CLARA, CALIFORNIA, U.S.A., 1997 DEC 8 (NB) -- By Craig Menefee, Newsbytes. When Intel [NASDAQ:INTC] proposed a 56 Kbps (kiloits per second) modem standard compromise last week that 3Com [NASDAQ:COMS] and Rockwell International [NYSE:ROK] could agree on, investors bid the faltering stock up about $3. But now a New York law firm has cast a pall on the good news by alleging in a class action lawsuit that 3Com masked bad news about its US Robotics acquisition while executives illegally sold off their own stock at inflated prices.
The suit came in the aftermath of a 3Com warning, issued Dec. 2, that slow sales would result in only "a slight profit." Complete results
are scheduled to be reported December 18.
Late Friday afternoon, New York law firm Kaufman Malchman Kirby &
Squire, LLP, announced it filed a class action complaint Dec. 5 in US
District Court for the Northern District of California on behalf of
people who bought 3Com stock between May 19, 1997 and November 6, 1997. The firm wants eligible people to consider becoming lead plaintiffs in the case.
The complaint alleges 3Com and several of its officers and directors
violated US federal securities law during that period. In a separate
announcement Saturday, San Diego law firm Milberg Weiss Bershad Hynes & Lerach LLP said the lawsuit charges 3Com's top insiders
"manipulated and artificially inflated the price of 3Com's common
stock by making a series of false and misleading statements" about
the aftermath of the US Robotics deal.
Milberg Weiss alleged 3Com falsified its first-quarter FY98 financial
results "for the three-month period ended August 31, 1997, by
artificially inflating its revenues and earnings per share" by not
being forthcoming about the state of its channel inventory or its
lack of success in solving those problems.
Milberg Weiss said the allegedly false financial statements zoomed
the price up from $37 on May 19 to a high of $59-11/16 during the
"class period," for a 61 percent increase in less than 2 months. The
law firm alleges the inflated prices let 3Com insiders sell off 2.6
million shares for as much as $58-3/8 per share, bringing in "over
$131 million."
Stated Milberg Weiss: "Five insiders sold 100% of their 3Com shares,
seven sold 44%-88% of their 3Com shares and four sold 10%-25% of
their 3Com shares, all before the truth regarding the severe problems
with 3Com's disastrous U.S. Robotics merger, bloated channel
inventories, and greatly diminished revenue and EPS prospects began to be revealed and the price of 3Com stock dropped to as low as $28-1/2 per share."
Law firm Kaufman Malchman said investors who bought stock during the class period have 60 days to become lead plaintiffs but must satisfy certain legal requirements. It invited interested investors to call
888-529-4787 toll-free in the US or Canada, or 212-371-6600
internationally, or email kmkslaw@aol.com .
3Com did not reply to Newsbytes calls before deadline.
Reported by Newsbytes News Network: newsbytes.com .
This was the information plus a few phone calls that have me considering COMS as an investment. Remeber, the whole fracus is over modem sales and earnings/revenue disappointment. Maybe thjey are about to get back on track. Potential double if things work out or potential 25%-50% recovery once things get back to normal.
JP Morgan already has upgrade COMS to a buy.
BTW-Even TWA which fell below 6 right after the crash is now over 11. Not bad for a pathetic excuse for an airline (Yep, I sold too soon and am slightly irritable).
Andrew |
