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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.

By Electronista Staff
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  1. dynsight

    Fresh-Faced Recruit

    Joined: May 2005



    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.

  1. jmelrose

    Forum Regular

    Joined: Mar 1999


    3rd world aid?

    This is Bono's private equity investment group. Interesting that they are investing in Palm.

    Wikipedia has an entry about the group... they have an interesting, and successful, history thus far.

  1. Guest

    Fresh-Faced Recruit

    Joined: Nov 1999


    short term financing

    Clearly, Palm is readying itself for sale. It hopes to gain the interest of somebody else to buy the company, based on the OS it demo's at CES.

  1. icewing

    Fresh-Faced Recruit

    Joined: May 2008


    successful history

    "they have an interesting, and successful, history thus far"

    Too bad Palm doesn't...

  1. testudo

    Forum Regular

    Joined: Aug 2001


    Re: why?

    and the stylus is cumbersome, actually.

    Well, to a lot of people, using a stylus is a lot easier and more precise than using one's fat fingers to perform certain actions.

    Plus no ugly fingerprints!

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