Palm will receive about $84 million from the stock offering, which should help it steady the ship before the launch of the Pre smartphone.
Palm Pre smartphone (click for larger image)
Palm is looking to boost its working capital before the launch of the Pre smartphone.
The smartphone company said Monday it was increasing the public offering of common stock to about 23.12 million shares, with a $6 price per share. Palm said it will receive about $83.9 million from the offerings, which it will devote to the much-anticipated release of the Pre.
The company unveiled the Pre at this year's Consumer Electronics Show, and it was well-received by the press. The handset has a 3.1-inch touch screen, a slide-out QWERTY keyboard, and all the connectivity and multimedia features one expects from a high-end smartphone. The operating system, known as webOS, is also very attractive because it was built from the ground up with constant Internet connectivity in mind, and it has an innovative user interface.
Palm was once the king of the U.S. smartphone market, but it has been steadily losing mindshare and market share to Apple's iPhone and Research In Motion's BlackBerry line. It's banking on the Pre and webOS to help it mount a comeback and capitalize on the growing sales of smartphones.
But the anticipation for the Pre could be hurting Palm's bottom line in the short term, as the company said its revenue for the third quarter would be less than expected because of lower-than-expected sales of smartphones. It appears that potential smartphone owners are ignoring devices like the Treo Pro in order to wait for the Pre, which is expected to launch in the first half of the year.
Elevation Partners, which has invested more than $425 million in Palm over the last couple of years, received about $49 million from the offering.
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