Shares in Palm, the maker of handheld computers, plummeted to an all-time low of $5.03 today on the Nasdaq.
This news follows the company's fourth-quarter profits warning last Thursday.
The shares slip – they fell $2.02 – was also affected by Palm confirming that its merger with software house Extended Systems had folded. The deal, valued at $264 million, was expected to boast the popularity of Palm's handheld computers among corporate users.
The California-based company is anticipating a fourth-quarter operating loss of between $170million and $190million – over double its earlier estimate of between $80million and $85million.
One analyst told BBC Online: "I think most people were expecting a big write-off, but taking the revenues down another 50 per cent and killing the Extended deal, was what was shocking."
Palm also announced in March that it was laying off 250 workers – 13 per cent of its workforce – and that the redundancies would be "the first of many".