Handspring Files for IPO

Handspring Inc., a maker of handheld computers started by Palm, Inc. alumni Jeff Hawkins and Donna Dubinsky, plans to sell shares in an initial public offering.

The company filed with the U.S. Securities and Exchange Commission (SEC) to sell $300 million (US$) of stock, though it did not list the number of shares it plans to sell or give an estimated price.

Hawkins, inventor of the wildly popular Palm Pilot, served as vice president of research at GriD Systems Corp. before founding Palm in 1992. He holds nine patents for various handheld devices and features. Dubinsky, formerly president of Palm Computing, founded Handspring to create handheld computers aimed at the consumer market. Handspring’s vice president of marketing and sales, Ed Colligan, is also a Palm veteran.

A Different Market

The market for Internet-related IPOs has cooled considerably since Palm debuted, tripling in value in its first day of trading. The stock has since come back to earth, closing Friday at 44 7/8, but that is still above its initial public offering of $38 a share.

“This is going to have a more steady entrance,” said Jeff Hirschkorn, senior analyst at IPO.com, referring to the Handspring offering. Though Handspring is going public in a shakier market than Palm, he said, the company is a better value. “They have a better model,” he said. “With Palm, you have the product without the founder.”

New in Stores

Handspring has been selling its Visor computer and related products through its Web site since October 1999, and just recently began offering them through retailers. The company had revenue of $15.8 million for the six months ended January 1st.

Handpring said its Visor has won “numerous awards,” including PC Magazine’s Technical Excellence award. It has also been included in best products lists at CNET.com and Business Week.

The company expects demand for handheld computers to grow rapidly, though it noted in its SEC filing that “product evolution in this sector is still in its early stage.”

Working Capital

Proceeds from the IPO will be used to provide working capital for the next 12 months or so. Any extra will be invested in “short-term, interest-bearing, investment-grade securities,” according to the SEC filing.

The offering will be led by Credit Suisse First Boston. Hirsckhorn said the company’s ability to get such a high-profile underwriter to lead the sale is a further sign pointing to success.

Handspring is headquartered in Mountain View, California.

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