3Com Shares Rise on Optimism for Palm Organizer Initial Offer
Bloomberg - 12/14/88, 3:49 AM EST
Santa Clara, California, Dec. 14 (Bloomberg) -- 3Com Corp.
shares rose as much as 13.5 percent in German trading after its
Palm Inc. unit, the No. 1 electronic-organizer maker, filed for an
initial public offering of stock and said Nokia Oyj, Motorola Inc.
and America Online Inc. will buy shares.
3Com, the No. 2 computer-networking equipment maker, rose as
much as 5.9 euros to 49.5 euros ($50.18) in Frankfurt. Palm, which
is 3Com's fastest-growing business, will be spun off to 3Com
shareholders six months after the IPO.
Nokia and Motorola, the top two cell-phone makers, and No. 1
Internet service AOL agreed to invest as much as $225 million to
buy Palm stock in private placements, giving the three companies
as much as 4.5 percent of Palm's capital stock, the filing said.
Motorola plans to use Palm software in new wireless products,
while AOL will offer its online service on Palm's devices.
Palm filed yesterday with the Securities and Exchange
Commission to sell $100 million worth of common stock, though the
filing gave no precise details on how many shares the company
hopes to sell or how much the IPO would raise.
''This will be very well-received'' by investors, said
analyst Patrick Houghton of Sutro & Co., who rates 3Com shares a
''buy.''
Houghton valued Palm at about $10 billion, or two-thirds of
3Com's $15.5 billion market value. Palm accounted for $176.5
million, or 13 percent, of 3Com's $1.39 billion in revenue in the
quarter ended Aug. 27.
More than 5 million Palm devices have been sold since their
introduction in 1996. The handheld units let users program phone
numbers and memos on a liquid-crystal screen with a stylus. In
recent months, 3Com has licensed the Palm operating-system
software to high-profile companies like Nokia and Sony Corp.
The investments by Nokia, Motorola and America Online will
occur at the same time as the closing of the IPO, Palm's filing
said. The filing defined capital stock as outstanding common stock
as well as options that have been granted as of 2000.
quote.bloomberg.com
o~~~ O |
