Palm seeks to raise money for Pre launch
Palm announced Monday plans to offer up a bundle of stock, as it seeks to raise capital for the launch of its highly anticipated Pre smartphone.
The handheld device maker, depending on market conditions, plans to offer 18.5 million shares in a secondary offering between now and March 31, a Palm spokeswoman said.
Proceeds from the sale will be used to repay $49 million to its investor Elevation Partners, with the remainder going toward working capital for the launch of the Pre and future product development.
With Palm currently trading at $6.38 a share, the offering would be valued at $118 million if it were to go out today with Palm collecting more than half for its Pre efforts.
The plans for the follow-on offering stem from an agreement Palm and Elevation struck late last year.
Under the arrangement, Elevation Partners invested $100 million in Palm and allowed the handset maker to have the freedom to force it to re-market 49 percent of its Palm shares that were tied to its series C preferred stock and warrants. But Palm has to exercise its rights to do so by March 31.
Prior to Elevation's announcement, Palm's stock had been trading in the $1.50 to $2 a share range for much of December.
Palm seeks to raise capital for the launch of its Pre smartphone.
(Credit: Corrine Schulze/CNET)
Dawn Kawamoto covers enterprise security and financial news relating to technology for CNET News. E-mail Dawn. 
Hmm...
Are you going to the pre launch? No I want to go to the real launch.
Palm are engaged in pre testing. When does the actual test start?
If I blog about the phone I'll be writing a pre post.
If it breaks I need to get a pre-fix.
It goes on and on
- by ryangeo March 15, 2009 5:05 PM PDT
- Does anyone actually know when the pre is going to be released?
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