Palm Inc. the Palm organizer business unit of 3Com has
filed for an Initial Public Stock Offering (IPO) which is expected to raise some
$100 million in capital for the new company. Palm is to be spun off officially
from 3Com about six months following the IPO.
Already, Nokia Oyj, Motorola and America Online have
purchased $225 million worth of Palm stock for a 4.5 percent of the company's
capital stock. Analysts applauded the IPO move. Palm has a huge value, which is
not appreciated as part of 3Com. The Palm IPO will be one of the biggest in
stock market history. Palm will have an estimated initial market value of $10
billion. That compares to the $15.5 billion market value of 3Com. Sales while,
Palm will have annual revenue of $175 million compared to $1.4 billion for 3Com.
Some 5 million Palm devices have been sold and the Palm
operating system is rapidly gaining popularity in a variety of handheld
computing and communications devices. Palm and America Online plan to offer
Internet services over Palm devices, while Motorola is licensing the Palm
software for new wireless products. For America Online, it's the first time its
service would be offered on a handheld device.