Palm secured a $100 million equity investment from Elevation Partners, getting a lifeline of support as it enters a critical juncture, faced with mounting losses, weak smartphone sales and the launch of a new operating system that could potentially revive the company.
Elevation, a private equity firm, got Series C preferred stock in the deal, which it can convert into common stock at a price of $3.25 per share. The company also will get warrants to acquire 7 million shares of Palm common stock at the same price.
The infusion of cash and support comes at a perilous time for Palm. The smartphone maker just posted a loss of $506 million in its fiscal second quarter and saw both its revenues and the number of smartphones sold drop. The news also comes just ahead of Palm's expected launch of its new operating system, Nova, which it is set to unveil at the Consumer Electronics Show in Las Vegas early next month.
- see this release
Palm loses $506 million, sees drop in revenue
Palm hoping for a spark with Nova OS