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Palm holders to get PalmSource stake
NEW YORK (CBS.MW) -- As Palm and rival Handspring merge, Palm shareholders will get shares of PalmSource stock under details of a spinoff plan filed late last week.

While the deal is not an initial public offering, it will represent the launching of a publicly traded company, spinning off Palm's software unit to create PalmSource some time in the fall.

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PalmSource will trade on the Nasdaq under the ticker "PSRC" with Palm owners receiving 0.34 shares of the software company for every share of Palm that they own.

PalmSource will trade on the Nasdaq under the ticker "PSRC" with Palm owners receiving 0.34 shares of the software company for every share of Palm that they own.

Shares of Palm (PALM: news, chart, profile) rose 42 cents to close at $16.97 in Monday action.

Based on Thursday's closing price, PalmSource shares will debut at $5.63 per share.

The spinoff is part of a purchase agreement between Palm and hand-held rival Handspring (HAND: news, chart, profile).

Handspring stockholders will receive 0.09 of a share of Palm common stock for each share of Handspring common stock.

The deal requires an OK from shareholders.

Palm and PalmSource will both continue to use certain Palm-related trademarks and domain names. Palm will hold a license for PalmSource software.

David Nagel is serving as CEO of PalmSource.

Palm said the spinoff will allow PalmSource grow its licensed business and innovate technology.

It'll also allow "greater opportunity for management teams and employees of both Palm and PalmSource to focus on their respective businesses."

For the nine months ending Feb. 28 of this year, PalmSource rang up a net loss of $18.3 million and revenue of $56 million, compared to a net loss of $20.2 million and revenue of $51.4 million in the year-ago period.