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The Night Watch: 3Com's on the Comeback Trail on Palm IPO News

Applied Digital Solutions also higher on B2B announcement.

Look out for the big 3Com (COMS) comeback! In after-hours action, the company had investors in the palm of its hand after a disappointing day session. 3Com ended off 1 5/8, or 2%, to 79 1/16, despite being raised by Lehman Brothers to outperform from neutral and announcing a CDMA deal with Samsung.

Tonight though, 3Com's fortunes have reversed significantly. The stock rose 6 5/8 to 85 5/8 on 145,000 shares on


ECN after raising the projected price range for its pending IPO spinoff of its Palm Pilot unit. 3Com's signature Palm Pilot, one of the best-known palm computing brands, was originally projected at an offering price between $14 and $16 a share. After the bell, 3Com more than doubled that price, revising the range to between $30 and $32 a share.

Because the new Palm Pilot unit is a wholly owned 3Com subsidiary, investors were excited about the revised price range, which is now expected to net about $664 million on a 23 million-share offering. After the offering, there will be 562.2 million outstanding shares in Palm Pilot, listed "PALM" on the

Nasdaq Stock Market

, with 3Com holding 532 million just after the offering. These 3Com-held Palm shares will be divested within six months, with the shares going to 3Com shareholders.

"Vertical trade communities," eh?

Applied Digital Solutions


rose 1 7/8 to 13 3/4 on 776,000 shares on Island after announcing its new business-to-business plan, which it labeled "vertical trade communities." These communities, which shouldn't be confused with other perpendicular business spaces such as office buildings, will be used to promote Applied Digital Solutions' products while creating an arena for companies to share information.

The vertical communities will focus on three separate, but interrelated, technology sectors: networking, telecommunications and Internet. The company said it expects to get vendor support for the communities from industry heavyweights like


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, while enabling users to create business relationships among themselves. In a press release, Applied Digital's CEO Richard Sullivan said the company was targeting "computer telephony Internet integration audiences."

When this announcement hit Wall Street earlier today, investor reaction was overwhelmingly positive. Applied Digital became a vertically traded commodity, rising steadily before spiking to a record close at the bell. When the day session ended, Applied Digital Solutions had a gain of 2 7/16, or 25.8%, to 11 7/8. Tonight, it extended that winning streak.

Turn it up, bring on the NOIZ.



Public Enemy

have nothing on

Micronetics Wireless


tonight. The New Hampshire-based broadband equipment maker gained 10 9/16 to 36 on 536,000 shares, squeezing more gains from a day that saw it jump 14 11/16, or 136.6%, to 25 7/16 in regular trading.

The impetus for the move was Micronetics' announcement regarding a new product, which goes by the charming name of "integrated AWGN Generator and Multi-Path fading simulator." The device, used to filter out noise in Code Division Multiple Access, or CDMA, systems, will be publicly demonstrated at a New Orleans wireless trade show. Investors were excited about the product because it works on CDMA systems, which are a staple of some wireless technology and frequently mentioned in the same breath as


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Volatility in Micronetics was severe. During the first hour of the postclose session, the company had a gain of more than a point and traded in a range just north of 26 1/2. But as the night progressed, the gap between the buyers and sellers widened, with buyers taking higher prices, shooting the stock up from a 3- to 9-point gain in a 15-minute span shortly before 5:30 p.m. EST.

The nouveaux rich got richer.



gained 2 to 18 7/16 on 209,000 shares on Island. Tonight's move extends a day-session jump of 1 7/16, or 9.6%, to 16 7/16. The company has released no news since Friday, but momentum and interest in the microcap have been rising recently, following the overall strength in biotechs. Cytogen is up 26% since Thursday.

Superconductor Technologies

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added to its day-session gain of 31 3/8, or 46.5%, to 98 7/8 by tacking on 8 17/64 to 107 1/2 on 54,000 shares. Recently, shares in this company have put the "gang" in gangbusters, rising 653% since Feb. 16, when its stock shot up on news that it received 27 orders for its SuperFilter Systems from an unnamed cellular service provider. Tonight, Superconductor moved on momentum alone, as the company made no new announcements.

Another recent success story had a happy ending in the postclose session.

Pacific Softworks


rose 2 3/4 to 13 1/4 on 96,000 shares on Island, capping a gain of 2 9/16, or 32.3%, to 10 1/2 during the day.

American Eco


was still atop Island's most actives list, trading on heavy volume after announcing the receipt of a $6 million contract. It rose 1/32 to 1 1/32 on 1.45 million shares on the news. During the day, American Eco rose 1/32 to 31/32.

Action Contract Services, an American Eco unit, received the contract and will be responsible for the installation of steel pipe racks, some electrical and instrumentation work and other construction tasks. The contract is part of the NROC Project, based in Port Arthur, Texas, which aims to create the largest steam-cracking unit in the world.

Island ECN, owned by Datek Online, offers trading, mainly in Nasdaq-listed stocks, from 8 a.m. to 8 p.m. EST.


MarketXT, formerly Eclipse Trading, offers after-hours trading to retail clients of Morgan Stanley Dean Witter's (MWD) Morgan Stanley Dean Witter Online, Mellon Bank's (MEL) Dreyfus Brokerage Services and clients of Salomon Smith Barney. It is also available to clients of, CyBerCorp and Interactive Brokers. Clients can trade 200 of the most actively traded New York Stock Exchange and Nasdaq Stock Market issues, 4:30 p.m. to 8 p.m. EST Monday through Thursday.


explains how the rules change when the sun goes down in Investing Basics: Night Owl, a section devoted to after-hours trading.