Palm needs money for launching the Pre, developing other products
Palm has just announced its intention to remarket around 18.5 million common shares which underlie preferred stock and warrants that Elevation Partners has acquired in January 2009.
Assuming the remarketing will be completed, Elevation Partners would receive $49 million, representing the price it initially paid for the shares, while Palm should receive all net proceeds in excess of this amount.
The Sunnyvale company said the money would be used in order 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.”
For the moment, the actual release date of Palm Pre is not known, but the smartphone is said to be outed in the US first, via Sprint (apparently, the carrier has exclusivity on the handset until 2010).
Palm surely hopes the Pre will be a huge success, because, otherwise, the company could face serious problems – it’s actually already facing them since RIM and Apple conquered a good portion of its smartphone market share.