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3Com Corporation
(coms)

I appreciate all the anecdotes and inside information.  If you want to know about major updates, e-mail me at  abs1nthe@abs1nthe.com.   Comments and criticisms are extremely welcome.

04/09/00
Sorry about the lack of updates.  I have been very busy lately.  As a quick summary of what I think, I hate their recent restructuring.  He has disenfranchised many customers.  He has hurt the 3Com brand-name and it will be a costly process to bring back trust in the market place.  Third party resellers are leaving in droves.  In short, people are mad.  Fortunately, we have Palm.   The Palm picture keeps getting better and better.  For Palm alone, I'm holding on.

03/19/00
3Com is considering another spin-off.  This time, they are looking to put their network business out for public pervue.  Considering the current state of affairs between Palm and COMS, this may not be the best of ideas.  They are looking to spin-off more of their business to concentrate on their optical business.  I have a question: What optical business?   This follows Lucent's recent announcements regarding their intention to spin-off their non-optical business.  For those of you that own LU, the spin-off of Lucent's networking business will leave gaping holes in that business as Lucent will retain many core technologies and products needed by the networking business.

03/07/00
Another drop in both COMS and PALM.  I think that COMS is coming towards its base support and will rebound from there-if it isn't there already.  Anything below $60 and the market is valuing Palm at less than $30/share and COMS sans PALM at $15/share--too cheap in my opinion.

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03/02/00
I've created a COMS Price Calculator which many of you will absolutely love.  It'll tell you how much COMS should be worth at given PALM prices.  Have fun.

(update: midnight)
Why-oh-why is the COMS:PALM price differential so high? 
In looking at the intra-day performance of these two stocks, it is obvious that COMS is tracking PALM.  So why then is COMS trading so low when the value of 3Com's PALM holdings alone are worth about $150/share?  The reason is because everyone is discounting the value of  3Com's Palm holdings.  By my estimates there is a formula they are currently using that puts that discount at over 50%

As we move closer towards distribution or as details and confirmation of a distribution come out, the discount should start to collapse.  To that end, 3Com has put out this little press release to reassure investors who are spooked by articles that indicate COMS shareholder may not get PALM shares.  These reports are false.   In fact, the 3Com press release goes so far as to say that the distribution may actually be 1.5 PALM to 1.0 COMS.  I have a little critique of one of those articles here.   To close the difference either COMS must move up to $160 or PALM must fall below $45.

Some of you have asked that I discuss where I think the price of the stock will be going.  I am unwilling to discuss those matters via forums other than direct one-on-one e-mail.  I do not want to damage the integrity of this site.

02/29/00
Happy Leap Year Day.  3Com is almost at $100.  At the end of last week, they raised the offering price of PALM to about $30.  Wednesday, the pricing will be made at 6:00 pm, Eastern time.

In non-Palm news, 3Com has teamed with Samsung to offer  "high-bandwidth" wireless access.  This is a pretty significant announcement.  Lately, Samsung has been making great headway in establishing itself as a technology powerhouse in Asia.  Before this announcement, Samsung had made several deals to shore up its LCD business and chip business.  This deal will allow Samsung to further its footprint in Korea's wireless world.  It allows 3Com to strengthen its hold on this important CDMA market by enhancing existing Korean CDMA infrastructure.  As the 3G standard takes hold of CDMA, we should see more announcements like this one.

I'm considering a revision of the Palm chart below which gives you a value for COMS should PALM reach certain levels and if you make assumptions about the value of the rest of 3Com.  One interesting thing is that most of you want me to increase the price range available for PALM prices.  But given PALM's current pricing of $30-32, the stock will need to jump 200% to fall of my chart.   I find it curious you would rather me raise Palm's addition to the value of COMS stock rather than the value of 3Com's non-Palm business which I put at only $12.5 billion.

I will split this page into two sometime after the IPO.  One page will talk about Palm, the other about 3Com.  I'm going to be needing help soon as the number of stocks followed here are getting out of hand for just one person.  If you see news that I don't seem to know about, please e-mail me.  Thank you.

Write me and I'll put your comments up.