Palm Gets More Runway By Raising $100 Million In Equity

Things were looking pretty bad for Palm (NSDQ: PALM), which started running out of cash, right before it was about to release a new operating system which they believe will help them compete in today’s world of advanced smartphones. But today they got a break by announcing that Elevation Partners has agreed to make an additional $100 million equity investment in the company. The company’s stock is trading 80 cents higher, or 32.5 percent, to $3.30 a share this morning.

Elevation will acquire newly issued preferred stock that is convertible into Palm common stock at a price of $3.25 per share, a 31 percent premium to the closing price of Palm’s stock on Dec. 19. Elevation will also receive warrants to acquire 7 million shares of Palm common stock at the same price. Prior to March 31, 2009, Palm can elect to cause Elevation to sell up to $49 million of this new investment to other investors on the same or better terms than on which Elevation invested. Roger McNamee, co-founder of Elevation Partners along with Bono and others, said: