Handheld computer company
said it took another step closer to splitting off its software division today, announcing that the board of directors has approved a reverse stock split.
The board unanimously approved a plan to perform a split with a ratio between 1 for 10 and 1 for 20. The plan will be presented to shareholders on Oct. 1 during the company's annual shareholders meeting. If approved, it would let the company perform the reverse split some time before April 1, 2003. It would affect the 579.2 million shares outstanding as of the end of May.
Such a move is typically used by companies to boost share prices that are at depressed levels. Palm shares closed the day down 8 cents, or 5.56%, to $1.36. Shares fell further in aftermarket trading, dropping another 24 cents, to $1.12 a share, a penny over their lowest level in 52 weeks.
"Having the flexibility to effect a reverse stock split is another step toward creating two independent, well-capitalized companies -- each a leader in its business," said Eric Benhamou, Palm chairman and chief executive officer, in a prepared statement.