Palm thrown $100m lifeline
updated 10:25 am EST, Mon December 22, 2008
Palm Gets Extra 100m
Palm on Monday said it has struck a deal with its recent investor Elevation Partners to receive an additional $100 million in equity. The deal involves a stock purchase at about a 31 percent value over Palm's actual stock price and lets the smartphone maker optionally sell the equivalent of $49 million in shares to outsiders at similar or better value before the end of March.
The company is optimistic regarding the deal and says it will give the company "added momentum" behind its 2009 releases in addition to "enhanced stability" in a poor world economy. Elevation Partners itself also believes that it should get back its return in the long term.
"Palm is in a position to transform the cell phone industry, and we are pleased to have the opportunity to make this additional investment," Elevation Partners' Roger McNamee adds.
The extra funding comes at a critical time for Palm, which is widely reported as running low on funds that would have seen it run out of operating income in less than two years. A string of worsening losses has also threatened to accelerate this process.
Both in teasers and in the company's latest financial conference call, Palm has directly implied that its CES launch event will play host to the introduction of its long-delayed Nova mobile operating system and at least one new smartphone line that uses it, the combination of which is hoped to turn Palm's fortunes after lackluster Treo sales and the low margins of the Centro have hurt the company's market share and cash.
Fresh-Faced Recruit
Joined: May 2005
why?
I feel like a toddler asking that question, but what has Palm done? Their smart phones are no longer that smart, and the stylus is cumbersome, actually. Not sure if I have seen someone using a Palm in the last six months.
Unless they have an uberphone in the wings, it is time for this relic to close shop.
At least they are not asking for a gov't bailout...yet.