Palm Inc. IPO Surges to Record High with $38 Per Share Valuation

Strategic Insights -

Palm Inc., a highly profitable unit of the 3Com Corporation, has ignited excitement in the market with its initial public offering. In a highly anticipated move, Palm sold 23 million shares at a price of $38 each, valuing the company at approximately $21 billion. This valuation surpasses the initially projected range of $14 to $16 per share, demonstrating strong investor enthusiasm for the Palm brand and its popular organizers. The IPO is set to boost 3Com's stock, with the parent company planning to distribute the remaining Palm shares to its shareholders within two quarters.

Key Takeaways:

  • Palm Inc.'s IPO saw the sale of 23 million shares at $38 each, generating $880 million in revenue.
  • The valuation of Palm Inc. is approximately $21 billion, a significant increase from the initially projected range of $14 to $16 per share.
  • 3Com Corporation will retain 94 percent ownership of Palm Inc. after the IPO.
  • Palm Inc. has earned a profit of $29.6 million, or 6 cents per diluted share, in the fiscal year ended May 28, 1999.
  • The parent company, 3Com Corporation, plans to distribute the remaining Palm shares to its shareholders within two quarters.
  • The listing of Palm shares on the Nasdaq has drawn significant investor attention, with the stock price surging to a new high.

Statistics:

  • $38 per share: the price at which Palm Inc. sold its shares in the IPO.
  • 23 million: the number of shares sold in the IPO.
  • 4.1 percent: the stake in Palm Inc. retained by 3Com Corporation after the IPO.
  • $21 billion: the valuation of Palm Inc. following the IPO.
  • $29.6 million: the profit earned by Palm Inc. in the fiscal year ended May 28, 1999.
  • 6 cents: the profit per diluted share earned by Palm Inc. in the fiscal year ended May 28, 1999.
  • $104.125: the closing price of 3Com Corporation shares on the day of the Palm IPO.
  • $6.125: the increase in 3Com Corporation shares on the day of the Palm IPO.
  • 94 percent: the ownership stake that 3Com Corporation will retain in Palm Inc. after the IPO.
  • 2 quarters: the timeframe in which 3Com Corporation plans to distribute the remaining Palm shares to its shareholders.

Sources:

  • Bloomberg (date not specified in original)
  • 3Com Corporation (date not specified in original)
  • Nasdaq (date not specified in original)
  • Palm Inc. (date not specified in original)