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.