Filed under: Deals, Management, Competitive strategy, Cisco Systems (CSCO), Private equity

This morning 3Com (NASDAQ: COMS) announced that private equity firm, Bain Capital, would put it out of its misery and pay $2.2 billion in cash for the company. 3Com has lagged so far behind that it has been painful to watch. 3Com and Cisco Systems (NASDAQ: CSCO) indeed could provide at least two to three chapters in an investing teaching and history book. Here’s the CliffsNotes version:

Summer of 1994 was a tough technology environment. Technology had a great run from 1990 through 1994, till summer that is. Valuations contracted and investor fatigue set in for about four to five months. I was traveling through Silicon Valley with a couple of British portfolio managers visiting companies. One day we had a breakfast meeting with then CEO Eric Benamou of 3Com and lunch with a senior VP at Cisco (whose name escapes me). Benamou was an intellectual, a refined man, but did not possess the street smarts necessary for a tech company CEO. He was arrogant and bluntly declared that Cisco’s days were numbered and 3Com would acquire any tech company necessary to achieve total domination. OK, great, and we went on to Cisco for lunch.

The senior VP was a classy guy, never said a bad word about any competitor and just explained Cisco’s game plan and execution philosophy. Here is the funny part: In July 1994, BOTH companies had a market capitalization of $9 billion.

Continue reading Cisco (CSCO) today 100 times bigger than 3Com (COMS) — it wasn’t in 1994

Read | Permalink | Email this | Comments

Share This

This entry was posted on Saturday, September 29th, 2007 at 12:20 am and is filed under Stocks Money News. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.