Now that the hoopla surrounding the Palm initial public offering has passed, 3Com shares have hit the skids. The network-equipment maker watched its shares fall 8 1/16, or 10 percent, to 75 Monday.
After surging to a 52-week high of 119 3/4 last week ahead of the Palm IPO, 3Com shares have lost 37 percent of their value in three trading days.
On Sunday, investment firm PMG cut 3Com from a long-term "buy" recommendation to a "hold" while Sutro & Co. raised it from a "hold" to a "speculative buy" rating.
Despite the short-term success of the Palm IPO, 3Com still has some huge question marks heading into its third fiscal quarter.
For that matter, Palm hasn't been able to maintain the momentum created by its hype.
Its shares were off 12 1/4 to 68 Monday, well below its opening day high of 165.
In its second quarter, 3Com did manage to slip past analysts' estimates, earning $131 million, or 37 cents a share, on sales of $1.48 billion.
However, the $1.48 billion in sales was off 4 percent from the year-ago quarter when it earned $133.4 million, or 36 cents a share, on sales of $1.54 billion.
Don't look for sales improvement in the historically weak fiscal third quarter, 3Com executives said during a conference call with analysts. Although 3Com previously predicted year-over-year improvement to start in the third quarter of fiscal 2000, the company now expects that won't happen until the fourth quarter.
First Call consensus expects it to earn 25 cents a share in the third quarter and $1.26 a share in the fiscal year.
If you're looking for a barometer of analyst confidence, 16 of the 30 analysts tracking 3Com's stock rate it a "hold."