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

To: Harold S. Kirby who wrote (29990)	4/23/1999 6:44:00 PM
From: Jon K.	Respond to of 45548

Friday Deal Talk Spurs Buyers By Erin Arvedlund Staff Reporter 4/23/99 3:05 PM ET As is often the case on Fridays, takeover chit-chat took off early in the trading session, sweeping up off the floor the long-rumored acquisition targets 3Com Corp. (COMS:Nasdaq) and Cabletron Systems (CS:NYSE). "On Fridays, you have to be careful," said one hedge fund manager. "Sometimes it's just the rumor du jour." Traders are also wary of breaking news over the weekend, so they buy calls as an inexpensive way to participate if a deal is announced. A trader in the 3Com options pit at the Pacific Exchange produced some of the usual names that have already made the merry-go-rounds: Swedish telecom giant Ericsson (ERICY:Nasdaq) and conglomerate Siemens of Germany. "It's hard to tell if the order flow is retail or institutional. But we are hearing the same rumors, that Siemens has dropped out, that Ericsson is in talks with 3Com, and a deal might be paid for in stock," the trader said. "[3Com] was unduly penalized for its acquisition of US Robotics, and now it's possible they'll end up selling off that part of the business to someone else," said one options strategist. "There's also quite a bit of expectation about a new product due out within a month or so." Call activity was notable in 3Com, with the stock up as much as 3 15/16 to 26 1/4. The out-of-the-money May 30 calls gained 3/4 ($75) to 15/16 ($93.75) on volume of 2,255 contracts, compared with open interest of 3,551. A spokeswoman for Ericsson declined to comment on the rumors; however, she pointed to the fact that all Ericsson's deals have been in cash. Siemens seems the more likely acquirer, although it likely has spent the $1 billion it earmarked for data-networking investments in the U.S. In March, the company's new U.S. subsidiary Unisphere disclosed plans to acquire several startups, including Redstone for $500 million stock. Hambrecht & Quist Analyst Eric Suppiger says 3Com has grown tighter with its longtime partner Siemens in recent months. Together they are developing integrated voice and data network systems for carriers. Suppiger rates the stock a neutral; his firm has no banking ties with 3Com.