Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: Glenn D. Rudolph who wrote (15578)	5/8/1998 9:33:00 AM
From: john defreitas	Read Replies (1) \| Respond to of 45548

view from street.com on COMS Wrong! Dispatches from the Front: Cramer Grapples with the 3Com Confusion By James J. Cramer 5/8/98 9:11 AM ET Damn this 3Com. I don't think I have ever, ever been so soundly whupped by a stock since Ascend tanked from 75 to 59 last year. Yet, it's not the drop that kills you in this stock. It's the potential. And that potential is nothing but torture. Because it bleeds you to death while you wait for it to turn. Take Thursday's action. A seemingly insignificant "adjustment" for 3Com's quarter, by Paul Weinstein, the DMG analyst who is closely followed on the stock, an ax if you will, sent the stock into a volume-choked black hole, down two and change. Oh, I know Wall Street's euphemisms. An adjustment is like saying someone's "passed on" instead of saying someone died. A number cut is killer for most tech stocks I follow. But it shouldn't have been for 3Com. Last week, when I saw the company at the H&Q technology conference in San Francisco, management presented the exact same case that Weinstein laid out, warts and all. This time, though, the news was not outlined in the rosy hue of San Francisco's St. Francis Westin Hotel. It was dumped on us in the stark, harsh light of the Deutsche Morgan morning call, and it was done by an analyst who knows his stuff, in a tape that has suddenly gone limp and ragged. No spin; just bad. I have a small position in 3Com with puts underneath to stop me out if the stock turns sour. I have more puts than I have stock, a testament to the company's repeatedly botched attempts to get its U.S. Robotics acquisition right -- and a concession that 3Com's accounting doesn't meet every buyside firm's standard. As is typical of this stock, though, it broke to a level where my 30 puts don't really protect me, yet a level I felt compelled to buy. The volume in the stock told me that a giant shareholder had given up on 3Com, which usually makes me bullish. You need to lose everybody in a stock like 3Com before it can have a serious advance. But the subsequent action after the big volume traded made me feel like, in the end, I, too, have to be shaken out if this stock is ever to have a serious run. The stock couldn't handle all of the traders and flippers and broke below where it needed to hold if it were to rally. To me, 3Com is a pitcher that, if it can get the speed under control, could be a major leaguer, in the same way that Ascend, when it finally got its business under control, blossomed into a real hitter. But yesterday's outing was just one more two-innings-and-out-high-earned-run-average day. Why stay tortured? Because 3Com has some businesses with great growth and if it can't figure them out someone else will. Because 3Com is the classic 3 down, 30 up stock. Because 3Com used to trade at a much loftier level and I believe it can happen again. And because I was short 3Com for much of the move down and I believe I can call the bottom. Yesterday the bottom was not reached. Probably not today, either. At some point I will decide if waiting for 3Com is like waiting for Godot. But in the meantime, I'll just keep the slow water torture going. Damn that 3Com. **********