Palm IPO stock price doubles to $32 per share
3Com subsidiary to be worth more than its parent
3Com yesterday upped the projected price range for Palm shares to be sold in its subsidiary's upcoming IPO from $14-16 to $30-32. The IPO is due to take place late tomorrow, with public trading commencing Thursday.
No great surprise this. Palm's IPO has been eagerly anticipated by investors - you can almost feel the drool - for ages, and demand for shares was always going to be very high indeed. And sure enough, 3Com increased the price range specifically in response to the level of demand.
The increased price range now assigns Palm a market cap of $17.96 billion, assuming shares are sold for $32. At that price, Palm will make $736 million out of the sale.
And that figure will leave Palm with a higher valuation than its parent company. 3Com is currently worth around $16 billion.
But that's still good news for 3Com, which will end up owning just over 93 per cent of Palm after the IPO. It will walk away with a staggering $16.7 billion on paper, most of which it plans to give away to 3Com shareholders six months or so down the line, you lucky, lucky people. ®