14 DAY TRIAL // Palm, the Sunnyvale-based phone maker, announced that it planned to remarket about 18.5 million common shares, which would underline 49 percent “of the units of Series C preferred stock and warrants” that Elevation Partners purchased back in January this year.
According to the company, the remarketing of the shares will allow it to receive all the net proceeds that exceed the sum of $49 million, which is the price the units have been originally purchased at. The company plans to use the funds to strengthen its working capital position, as well as to “further bolster the resources Palm is devoting to the launch of the Palm Pre and future product-development efforts.”
At the same time, Elevation Partners expects to be able to recoup the $49 million that it originally paid for the units. The company also stated that it should use the funds to acquire shares of Palm's common stock. Palm also announced that “the underwriters will have the right to purchase an additional 2.8 million common shares from Palm to cover over-allotments, if any.”
The phone maker is known to have experienced some difficulties lately, and it expects the upcoming Pre mobile phone to help it regain the market share it has lost in front of RIM and Apple. At the same time, it is also a known fact that the company invested a lot of resources into the development of Pre, which is already seen on the market as a strong competitor to Apple's iPhone.
For the time being, the actual launch date of Pre is still unknown, yet the handset is expected to come exclusively on Sprint, which will be the only carrier to sell it in the US until 2010. We know that both Palm and Sprint are working hard to prep the device for launch, and the carrier announced a meeting with the media to showcase the device working on its network; more info on the availability of Pre is expected to become available then.