|
Palm boosts IPO range
|
 |
February 28, 2000: 8:52 p.m. ET
Move sends shares of 3Com up more than 7 percent in after-hours trade
By Staff Writer Richard Richtmyer
|
NEW YORK (CNNfn) - Enthusiasm continued to mount for 3Com Corp.'s Palm Inc. spin-off Monday after the company raised the projected price range for its initial public offering to $30-to-$32 per share from $14-to-$16 per share.
Shares of 3Com (COMS: Research, Estimates) soared in after-hours trading on the news, adding 5-15/16 to 85, a 7.5 percent gain from Monday's Nasdaq closing price of 79-1/16.
3Com stock has risen sharply since December, when it announced that it would take the Palm unit, which makes the popular "Palm Pilot" handheld computing devices, public.
Palm, which is expected to go public sometime this week under the ticker symbol "PALM," expects to net $663.8 million from the sale of 23 million shares of common stock in the offering, according to documents filed with the Securities and Exchange Commission Monday.
 After the offering is complete, Palm will have 562.2 million shares outstanding, of which it will hold 532 million, or roughly 95 percent. The company plans to distribute the stock to 3Com shareholders within six months of the offering, the SEC filing said.
Getting in at the offering price are America Online (AOL: Research, Estimates) which will buy roughly 2.6 million shares; Nokia (NOK: Research, Estimates), which also will buy roughly 2.6 million shares; and Motorola (MOT: Research, Estimates), which plans to buy about 2 million shares at the offering price, Palm said in the filing.
Palm said it would use the net proceeds offering to pay a dividend as well as other expenses to 3Com, to increase its capital spending and marketing efforts, and to make investments and acquisitions.
Market observers are expecting a strong showing when the company floats its shares. Jeffrey Hirschkorn, senior market analyst with IPO.com, said some estimates are for Palm's stock to open as high as 300 per share.
If Palm's shares are priced at the high end of their adjusted range and stay there, the company will have a market capitalization of almost $18 billion, putting it in league with tech heavyweights such as Apple Computer (AAPL: Research, Estimates) and Eastman-Kodak (EK: Research, Estimates) as well as blue-chips such as J.P. Morgan (JPM: Research, Estimates) and Allstate (ALL: Research, Estimates).
During the six months ended Nov. 26, 1999, the Palm unit posted total revenue of $435 million and a turned profit of $22.5 million. 
|
|
|
|
|
 |
|
