Palm Gets a Lifeline from Elevation Partners

Elevation Partners has been insistent that it would not sell its 25% stake in struggling smartphone maker Palm Inc. (PALM), and on Monday it put its money where its mouth is. Silicon Valley's Palm announced that the private equity firm has invested an additional $100 million.

Palm said it issued Series C preferred stock that converts to common stock at a price of $3.25 per share. Elevation also gets warrants to acquire 7 million common shares at the same price. Palm could require Elevation to sell up to $49 million of this new investment to other investors at the same or better terms, the company said.

Palm didn't say exactly how large a stake Elevation now has in the company, but the move certainly puts a damper on rumors that the firm was planning to sell its previous investment, which it acquired in 2007 for $325 million. Shares of Palm climbed about 10%, to $2.73, in morning trading. -- Olaf de Senerpont Domis

See Dec. 22 press release from Palm
See Nov. 25 post from Tech Confidential

Comments

[Yagottabe K...:]

Palm will HAVE to say via some sort of SEC form how big a stake Elevation Partners got - some think they own the company now (more than half of it anyway).

2008 Dec 22 02:49 PM