saw its stock climb Tuesday as investors eagerly anticipated an initial public offering of the company's
Adding to Wall Street's enthusiasm was the disclosure Tuesday that
would each take a minority stake in Palm, which makes the handheld
Motorola and AOL will also license Palm Computing technology. Motorola will use the technology in its wireless products and AOL will offer its service on Palm products.
3Com continued to power upward, rising 4 5/8, or 10%, to 49 3/8 by midafternoon. The stock was trading around 30 just over a month ago. (3Com ended up 5 13/16, or 13%, to 50 5/8.)
Late Monday, 3Com, a computer-networking equipment company, said it had filed a registration statement with the
Securities and Exchange Commission
to take its Palm Computing subsidiary public early next year, offering less than 20% of the company's common stock.
According to the offering's prospectus, the three companies will invest as much as $225 million to buy the stock in private placements and take as much as a 4.5% total stake. "This suggests a stronger commitment to the Palm operating system platform," said analyst Erik Suppiger of
. He rates 3Com a market perform and his firm has done no underwriting for the company.
The licensing deal with Palm fits into Motorola's strategy of delivering wireless Internet services. The company, based in Schaumburg, Ill., is a leading cellular phone manufacturer.
Despite interest in the deal, Motorola shares were down 5 3/16, or 4%, to 123 3/8, AOL was down 3 5/8, or 4%, at 90 3/8 and Nokia was down 6 1/16, or 4%, to 161 1/8. (Motorola ended down 9 11/16, or 8%, to 118 7/8; AOL finished down 5 1/2, or 6%, to 88 1/2; and Nokia closed down 7 9/16, or 5%, to 159 1/2.)
The underwriting of Palm Computing's IPO will be led by
Morgan Stanley Dean Witter
will also underwrite the deal. No further details of the initial public offering were available.