Palm's stock price fell to $80.25 on its first full day of trading on Friday.
The price fell 14.8 per cent, after soaring to as high as $165 when it first started trading on Thursday.
The company's IPO was the most anticipated deal of the year, and Palm more than doubled its initial asking price - the original price was $14 to $16 and the company eventually settled on $38.
The company's disappointing performance came as a surprise to some analysts. In a CNet news report, Richard Peterson, an IPO analyst with Thomson Financial Securities Data, said: "There's been only two dozen IPOs that have doubled their pricing range, and Palm's 150 per cent gain is anaemic compared to what the others did."
According to the report, some analysts predict that the shares could fluctuate for a while because any IPO has to wait 25 days after trading before analysts can issue recommendations and reports.