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

To: joe who wrote (21383)	9/10/1998 7:24:00 PM
From: Wigglesworth	Respond to of 45548

NO Intel takeover!!! Although a marriage makes sense, negotiation regarding who's gonna be on top is still going on ... === Rumors Prop Up 3Com Shares As Broader Tech Sector Drops By NICK WINGFIELD THE WALL STREET JOURNAL INTERACTIVE EDITION SAN FRANCISCO -- Investors rallied around 3Com on Thursday as speculation resurfaced of a possible takeover by chip giant Intel. The stock action was one of the bright spots on a dark day for technology issues. 3Com added 1 15/16, or 7.6%, to close at 27 5/16 on about twice normal Nasdaq Stock Market volume. Shares of Intel fell 2 3/16 to 79 7/16, also on Nasdaq. Meanwhile, the technology-heavy Nasdaq Composite Index dropped 39.22, or 2.41%, to 1585.33, while Morgan Stanley's high-tech 35 index lost 9.88, or 1.84%, to 527.49. Wall Street analysts said 3Com investors were probably responding to longstanding rumors that Intel is interested in acquiring all or part of 3Com, a leading maker of modems and networking gear based in Santa Clara, Calif. The rumors gained new currency Thursday morning when a columnist from the TheStreet.com talked about them on CNBC. A spokesman for Intel, Robert Manetta, declined to comment on takeover rumors. 3Com spokesman Peter Ruzicka also declined to comment. Although analysts said the Intel talk has been circulating among traders for some time, they said a marriage of the two companies could make sense. Intel wants to become a more serious player in the market for low-end networking gear such as hubs, which could make 3Com a good fit, said Patrick Houghton, an analyst at Wheat First Union. The deal "would make a lot of sense for Intel," said Mr. Houghton. However, a deal between the two companies would likely face close scrutiny from governmental overseers, analysts said. According to Mr. Houghton, Intel and 3Com together hold about 85% of the market for network interface cards, or NICs -- the devices that allow personal computers to connect to corporate networks. Because of the large combined share, a takeover bid by Intel might arouse monopoly concerns in that market. Intel already faces charges by the Federal Trade Commission that it improperly used its dominance in microprocessors to impede innovation and competition in the PC marketplace. But analysts were also quick to point out that 3Com's depressed stock price, which makes the company much cheaper for potential acquirers, could also be fueling the takeover talk. Shares of 3Com have fallen sharply from a 52-week high of 59 1/16 as the company has fought to reduce its product inventory in distribution channels. Some analysts believe the company has largely worked through its inventory problems -- even though its stock price hasn't markedly improved. "I think it's probably the best turnaround candidate in the [technology] group," said Paul Weinstein, an analyst at Credit Suisse First Boston.