Yesterday, Palm remarketed shares in Elevation in hopes to snag some extra cash for the Pre. Today that paid off, with Palm reportedly receiving $83.9M in net proceeds from the transaction. In total, the handset manufacturer sold 23.1M shares at $6 a piece, surpassing the initial 18.5M planned sale.
This should give Palm some extra funds for operating costs, including the launch of their webOS handset. Palm last reported $220M at most in cash reserves, consuming as much as $100M in the last quarter, so the injection of cash could not have come at a better time. Treonauts reports that the underwriters, Morgan Stanley, also have the option to purchase an additional 3.5M common stocks within 30 days to cover any over-allotments, valued at about $21.0M.
ZDNet makes the point that Palm's previous spending habits could have led to bankrupcy, and that they're not completely out of danger. Although there's still no release date, the Pre has sparked enough interest to allow the company to raise cash via public offerings. CNN notes that this still may not be enough to see them through the launch, and the recent financing move may not be its last.
In a statement, Palm said it would "use the proceeds to strengthen its working capital position and to further bolster the resources it is devoting to the launch of the Palm pre and future product development efforts."
Palm shares gained ground today, with prices coming in at $6.90 after hours, up from $6.02 last night.
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