3Com Reveals Plans To Spin Off Palm Computing Subsidiary 3Com Reveals Plans To Spin Off Palm Computing Subsidiary Paul Jones
Despite Palm's incredible success, it was seen by many industry observers as tangential to struggling 3Com's core business. The move comes as Palm is set to face increased competition; it also opens 3Com up to renewed talk of a merger.
3Com said it will float an initial public offering by the end of this year or early next year, selling 20 percent of the Palm venture's shares and retaining the other 80 percent. Within six months, the company will transfer the remaining share stake to 3Com's shareholders, executives said.
Palm Computing had sales of $570 million in fiscal 1999--representing about 10 percent of 3Com's total sales, according to the company. But chief executive Eric Benhamou had told CNET News.com as recently as this spring that 3Com's Palm business had a "central place in the future" of the company due to its success as a business and its future role as a means to create more network connections, thereby increasing sales of the company's network switches.
