Handspring lowers IPO price range

Handspring ballyhooed IPO is losing momentum before it begins trading. The handheld computer company on Tuesday lowered the price range for its initial public offering of 10 million shares to $17-$19 a share from $19-$22.

Handspring (profile) is one of the lucky few to survive the weeding-out process that has plucked many less-promising issues off the calendar. Its IPO is expected to begin trading the week of June 12th.

Handpring's (Proposed ticker: HAND) hot wireless business may not even be enough to save it from the dearth of interest in new offerings amid market volatility. With blue-chips trading at a discount, investors are less likely to snap up new issues, said Kenan Pollack of IPO Central.

"The ones that will stay on course are legitimate firms in a solid business - the difference is that, if they had come out 7 or 8 months ago, they would have seen a pop of 200 percent, where as now it will only be 40," Pollack said.

The company disclosed the new range in a filing with the Securities and Exchange Commission.

Less than a month after Palm (Nasdaq: PALM) went public, the rival company founded by former Palm executives filed for its IPO. The initial public offering was initially expected to raise up to $300 million for the company, which recorded a net loss of $8.4 million in 1999, on zero revenue.

After increasing its price range to $30 to $32 a share from an original $14 to $16 a share, competitor Palm (Nasdaq: PALM) priced at $38, and rocketed to 145 in opening trade. That was March 2, and shares have come down a long way since then, trading up 7/8 to 22 1/4 Tuesday. Shares revived slightly from a low of 19 7/8 after an analyst said the stock was "oversold."

The company's other competitors include Palm OS licensees such as Nokia (NYSE: NOK), Sony and Qualcomm (Nasdaq: QCOM); members of the Symbian group including Psion, LM Ericsson (Nasdaq: ERICY) and Motorola (NYSE: MOT); and licensees of the Windows CE system, including Casio, Compaq (NYSE: CPQ), Hewlett-Packard (NYSE: HWP) and Sharp.

The Handspring IPO is being underwritten by Credit Suisse First Boston, Merrill Lynch, Donaldson Lufkin & Jenrette and U.S. Bancorp Piper Jaffray.