After posting dismal Q3 earnings, Palm was evaluating options to boost its budget for the launch of its webOS handset, which included remarketing common shares in Elevation Partners. Today, Palm exercised their right to do just that, remarketing 18.5M shares of the common Series C units of preferred stock and warrants acquired by Elevation Partners back in January.
The initial agreement was made when Elevation Partners infused the struggling handset maker with an investment of $100M in December of last year, allowing Palm to remarket 49% of its Palm shares tied to its series C preferred stock by March 31.
As a result, Elevation will recoup their $49M in original costs, with Palm receiving any net proceeds beyond that amount. Based on current market prices, the total value of the stock comes close to $105M, so Palm could be set up for a healthy allowance in excess of $50M for the launch of the Pre.
Palm shares fell after the news, closing down 2% at $6.02 today.
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