$100 Million Lifeline: Palm receives investment from Elevation Partners

January 29, 2009

After recently posting a $506 million loss and watching their revenues and smartphone sales drop, you might not consider Palm a smart investment. Private equity firm Elevation Partners hotly disagrees and backs that opinion confidently with a $100 million deal, according to a recent post on FierceWireless.

In the deal Elevation trades the equity investment for newly issued Series C preferred stock, which it can convert into common stock at a price of $3.25 per share along with warrants to acquire 7 million shares of Palm common stock at the same price.

Palm sees life on the horizon. “The additional capital from Elevation Partners will enable us to put added momentum behind the new product introductions scheduled for 2009 and will provide us with enhanced stability in unsettled economic times,” said Ed Colligan, president and chief executive officer of Palm, Inc.

What exactly is Palm looking towards? If you attended the Consumer Electronics Show at Las Vegas in early January you would witness proud-papa Colligan beaming at the Palm Pre smartphone and new operating system, Nova, Palm’s answer to top competitors, Apple and Research In Motion. Also unveiled, Touchstone, a wireless, inductive charger for the phone resembling a paperweight. If you missed it you can watch Colligan’s “Mobile is in our DNA” speech and phone unveiling here.

Early reports call the Pre, “smaller, rounder and slightly oblong version of Apple’s iPhone 3G.” The phone features include 3.1″ multi-touch display, slideout QWERTY keyboard, removable battery, 3 megapixel camera with led flash, 8 GB storage, EvDO RevA., Bluetooth stereo, GPS, and Wi-Fi.

Posted By Russ · In Industry 

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