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

To: Doughboy who wrote (28763)	3/4/1999 6:45:00 PM
From: Tim McGee	Read Replies (1) \| Respond to of 45548

I'm not really sure what they plan to sell to Siemans I don't see how they can sell the total control product line to Siemans and just give up on the Cable Head End business and VOIP opportunities unless they want the resulting company to be acquired by CISCO or LUCENT et al. I assume all the phone products would go with this. Somtimes the hardest thing to do is to admit failure. The strategy outlined by the company has resulted in failure. Hopefully the board has the intestinal fortitude to recognize this and deal appropriately. Here is what i think they should do. 1) The analog modem business provides nothing but headaches for 3Com. It depresses the stock value b/c people think of 3Com as a modem company. The only real value it brings is brand awareness for the next round of high speed modems. These new modems have virtually nothing in common with analog modems, in fact one might just call them routers - its more appropriate for what the devices do. So Coms should find someone interested in this business and sell it for $2-$3B. 2) They should spin off or sell the Palm Business. It is totally unrelated to COMS core businesses and has tremendous value. MSFT would pay many billions for this business (others might too). I don't like the thought of MSFT controlling Palm but shareholder value concerns would dictate that they get as much as possible for this. Perhaps a visit to a local Investment banker would convince the company that a public offer will bring in as many billions as MSFT would be willing to pay. If so, Then the best course is to take Palm public. 3) Re focus on core business: Switching and networking. This may still leave COMS with a revenue mix sensitive to price pressures. NICs and low-end hubs would still be part of the core product offering because they fit nicely the overall networking goals of the higher end switching products. This company would be able to produce predictable results by managing its shares outstanding. Even though they would end up with substantial R&D abilities, the downside with the resulting company is that they still do not have a way to compete head-on with the other giants of networking - but this company would fit more nicely into one of the giants (CISCO, LUCENT). May be an easier solution be acquired in a single transaction, but there are two many disparate product lines to make this feasible.