Palm public offering scoops £60m
Published: 10 Mar 2009 13:32 GMT
Palm has raised $83.9m courtesy of a public offering of 23.12 million shares at $6 each. With the move Palm has almost replaced the cash it burned in its fourth quarter.
The company said on Monday that it was aiming to raise $49m (£35m), but the offering was oversubscribed, allowing Palm to raise more money. The initial $49m offering consisted of 18.5 million preferred stock and warrants acquired by Elevation Partners in January.
Palm's $49m capital raise would have been a big help, but the $83.9m tally is significant for the company. As demand fell off a cliff last quarter ahead of the launch of the Pre, Palm burned through $95m to $100m. With the cash it raised, Palm has almost patched that hole in its pocket.
In a statement, Palm said it will "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 is not completely out of danger, but the Pre has sparked enough interest to allow the company to raise cash via public offerings. With one more quarter before the Pre makes a difference, Palm may need to raise more cash at a later date.
Credit: Palm raises $83.9 million; Finds balm for cash burn from ZDNet.com
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