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

To: Tim McGee who wrote (27886)	2/9/1999 9:02:00 PM
From: joe	Read Replies (1) \| Respond to of 45548

Tim, thanks for the response. Here's some of my responses to your responses. >>Back-end loaded quarters I raised this issue several quarters ago this thread. I was a bit concerned about Mgmt explanation that a quarter is back-end loaded. This problem stems once again from COM$ product mix and distribution channels. Every quarter is back-end loaded for COM$. They need to figure out ways to smooth this. It was discussed in Last CC.<< I guess you've had experience with back-end loaded stocks. I did not know that this was a problem this quarter. I'm not sure if it's a problem with other quarters. But, I thought 1/2 the problem was the perceived slowdown after Christmas, which is now being perceived as slower than expected by some. If this isn't the case, then heck, every year at this time, the stock can get knocked down 30% just because visiblity is rough. I would think that COMS has done something about it, which is, low-ball the estimate. That's why there's no change from last quarter .36 to this quarter .36. Low-ball it and reduce expectations. But, it seems to me that the Street took extremem drastic action about lowering expectation. So, yes, COMS should find a way to smooth it out, but sometimes it can't. Does this justify this volatility? >>Seasonally weak quarters<< Same response as above. I think COMS low-balls its weak quarters to make sure it has margin for error. As long as COMS is honest with the street, I don't see what the problem is. Street still does not trust COMS, it seems to me. Seems we should have been cut a little slack by now, with the COMS "turning the corner". Also, when they get more into their product transition, revs will smooth out. "Turning the corner" to me just means that the USRX problems are out of the way. The next step is to be firmly established in its new generation products. >>AT&T contract We've been waiting forever for this. COM$ should be more aggressive in pursuing a commitment from AT&T.<< Well, I don't know. I was reading about AT&T and the billions they will have to spend with TCI, and still only have something like 40-60% coverage of US. Plust the merger still has to be approved. More testing has to be done. But, IMO, the good news is that there is fire under AT&T's butt. TCI and TIME WARNER are already testing Cable Modems extensively. I think once they know the merger is approved by the gov't, they may start ordering modems at that point. PR: I agree with all you say. Problem is that COMS is perceived to be weaker than CSCO. I think the only PR that can really work to get the respect that your talking about, is to make tough quarters like this one, and to get contracts signed on the dotted line. That's the best kind of PR, IMO. The kind that commands respect. yup, the entire market is jumpy and may take a dive. Looks the the interNUTS are finally seeing their exuberance come to an end, and will take tech down with them. I'm hoping $$ gets directed more broadly as a result.