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Palm to remarket $49m of stock in survival bid

updated 09:40 am EDT, Mon March 9, 2009

Palm Resell Stock

Palm this morning took action to keep itself afloat and chose to put 18.5 million shares of its stock back on the market. The move gives the early smartphone pioneer at least $49 million in cash and would simultaneously give Palm's primary investor, Elevation Partners, that same money to use in buying back stock at Palm's higher price. How many of these shares will be bought isn't specified, though buying all 18.5 million shares would equal roughly $113.8 million, or more than double their original value.

The company directly explains the share deal as an attempt to bolster launch of the Pre smartphone, which is due sometime in the next three months and which is widely deemed the company's last true chance at regaining a significant foothold in the smartphone market. Any money not used to orchestrate the launch will also go into "future product-development efforts," Palm said.

A cash infusion is considered crucial for the developer's survival. The company has no more than $220 million in cash on hand and has been concerned for months that it may need to take out loans or take other drastic steps to avoid bankruptcy. Without the Pre, the company has seen gradually declining sales as users either drop the Centro and Treo lines for competitors or else wait for the Pre.




by MacNN Staff

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  1. Eldernorm

    Joined: Dec 1969

    0

    But Will it...

    Will the Pre ever hit the market??? Will Palm even been running when the Pre is ready to sell??

    There has been a lot of noise from the company and its investment partner... but the more noise.... the bigger the worry???

    Just a thought,

    en

  1. webb3201

    Joined: Dec 1969

    0

    Last gasp

    I think they will pour everything they can into getting the Pre on the market. This is the last chance for them to hold off total collapse. They really need a big hit (iPhone like) to keep them moving in this economy. A real shame as they really had some of my favorite PDAs and Smartphones. Having no major updates in 5 years will kill any manufacturer.

  1. webb3201

    Joined: Dec 1969

    0

    Last gasp

    I think they will pour everything they can into getting the Pre on the market. This is the last chance for them to hold off total collapse. They really need a big hit (iPhone like) to keep them moving in this economy. A real shame as they really had some of my favorite PDAs and Smartphones. Having no major updates in 5 years will kill any manufacturer.

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