3Com Corporation
(NDAQ:COMS) shares rose $0.24, or 5.7%, to $4.45 after Kenneth
Griffin's Citadel LP disclosed an 8.4% stake in the company and
expressed his concerns with the company's management team.
The
hedge fund manager pointed out in his letter that 3Com's share price
has under-performed both relative and absolute measures of shareholder
return for many years. More recently, the market's reaction to 3Com's
purchase of Huawei Technologies' 49% ownership in H3C has resulted in
nearly a 20% decline in share price. Clearly change is needed!
Kenneth
believes that many options exist today for the creation of substantial
value for 3Com shareholders and insisted that he be able to meet with
the management team and board of directors to discuss their corporate
strategy going forward. While there was no clear indication of what
"options" are being considered to create "substantial" value, many
investors are confident that the shareholder will be able to help the
company.
Citadel is one of the largest and most successful hedge
funds in the world. Its manager, Kenneth Griffin, is a self-made
billionaire and extraordinary individual. He founded Citadel in 1990
with just $4.2 million and grew it into the $13.4 billion fund that we
know today. The majority of the firms profits come from active trading
(its daily trading volume is estimated to amount to 3% of the activity
in New York and Tokyo!) but it is carefully moving into more
fundamental and activist plays like this one.
Combined, these factors make COMS a stock
worth following!
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