SAN FRANCISCO -- 3Com (COMS) is the takeout target du jour.
Shares of the beleaguered networker bounded 3 15/16, or 17%, higher to 26 3/8 at midday. One trader, an industry analyst and numerous bulletin-board speculators say the rumor is that European telecom suppliers
will snap up Santa Clara, Calif.-based 3Com.
"The daytraders are eating it for lunch," said Craig Johnson, principal with the
consulting firm. A daytrader himself, Johnson wished he'd pounced on the stock this morning.
Trading is characteristically volatile. Moving in small lots, 3Com spiked from 22 at 9:45 a.m. to 27 shortly after noon, then settled as traders took quick profits. Someone with the alias "mejor1" wrote at 12:15 p.m., "Covered short and loaded up. if this rumor is true, I stand to make a killing now!" The stock promptly slipped from its intraday peak of 27 to 25 1/2, then recovered a bit. The speculated price of a takeout wasn't immediately available; the Europeans have paid for recent acquisitions with cash rather than stock. 3Com is a longstanding partner of Siemens, which is based in Germany.
Johnson suggested that today's rumor has given 3Com more of a pop than previous ones because short-sellers have cleared out of the stock. Shares of the troubled networker are down from a peak of 48 in late January.
The rampant consolidation in communications -- punctuated yesterday by
-- has investors scouring for the next target. "People are scrambling to buy whomever they can," said one institutional trader.
Representatives for 3Com and Ericsson declined to comment. Siemens could not immediately be reached for comment.
VeriSign Slips on Downgrade
. After reporting decent earnings after the close of trading Thursday, the company had the misfortune of being downgraded by
Morgan Stanley Dean Witter
analyst Mary Meeker.
"While we think the fundamentals are outstanding and though the company is executing superbly, we are changing the rating to neutral based solely on valuation," Meeker wrote. Despite the downgrade, Meeker increased revenue and earnings estimates on VeriSign for 1999. Morgan Stanley Dean Witter has done underwriting for VeriSign.
VeriSign was down 17 9/16, or 12%, at 129 1/8 around midsession.
Going Public on the Net
Two Internet IPOs had successful debuts today, though not smashing compared with the lofty standards set by some of their predecessors.
, a provider of software for Internet retailers, was up 15 1/8, or 108%, at 29 1/8. Also,
, an online music Web site, was up 9 7/8, or 45%, at 31 7/8.
AT&T's bid for MediaOne is having a positive impact on
. AT&T has a controlling interest in @Home through its purchase of
, and MediaOne is a part owner of
, one of @Home's competitors. AT&T's purchase of MediaOne could possibly be a precursor to an @Home merger with RoadRunner. Such a merger has been speculated for some time now.
@Home was trading up 12, or 8%, at 157 7/16.