Palm is asking its shareholders to approve a reverse stock split, in a bid to shore up its share value.
In a reverse stock split, shareholders end up with fewer shares in hand, but the stock's price increases. Palm's board of directors believes the move will prepare the company better for Palm's plans to spin off its software division, PalmSource.
If the move is approved, the board will choose a reverse stock split ratio from one-for-ten to one-for-twenty, and implement it any time before April 1. Shareholder's will be asked to vote on the proposals during the AGM on October 1.
“Having the flexibility to affect a reverse stock split is another step toward creating two independent, well capitalized companies,” said Eric Benhamou, Palm chairman and CEO.
Palm shares closed at $1.36 Friday, falling to $1.23 in extended trading.