Palm gets $100 million cash infusion

Palm received a $100 million investment from a venture capital firm on Monday.

Smartphone maker Palm received a cash infusion from a venture capital firm on Monday that could lift the company from its sagging fortunes.

Under terms of the agreement, Elevation Partners will provide US$100 million and increase its investment in Palm. The investment comes at a time when Palm is struggling to remain a player in the mobile phone market, where it has been eclipsed by rivals Research In Motion and Apple. Palm's product offerings include the Centro and Treo smartphones.

"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," Ed Colligan, Palm's CEO, said in a statement.

Colligan acknowledged that the company was working through an "undeniably difficult period," in a statement last week when announcing the company's second-quarter financial results.

Palm reported revenue of $191.6 million for the second quarter ending Nov. 30, down from $349.6 million it reported a year earlier. The company sold 599,000 smartphones in the quarter, down 13 percent from a year earlier, while revenue from smartphones saw a 39 percent drop.

The company may continue to struggle through next year as sales are expected to slow down. IDC last week said mobile phone shipments would decline by more than 2 percent next year compared to 2008. That is the largest decline since 2001, IDC said, noting that the global economic crisis was a major factor in the drop.

Palm will reportedly introduce new smartphones and a new Linux-based operating system for mobile devices, code-named Nova, next year.

Under terms of agreement, Elevation will pay $3.25 per share, a 31 percent premium on last Friday's closing prices of Palm's stock. The deal is expected to close by the end of January.

Join the newsletter!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.
Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Agam Shah

IDG News Service
Show Comments

Most Popular Reviews

Latest Articles

Resources

PCW Evaluation Team

Tom Pope

Dynabook Portégé X30L-G

Ultimately this laptop has achieved everything I would hope for in a laptop for work, while fitting that into a form factor and weight that is remarkable.

Tom Sellers

MSI P65

This smart laptop was enjoyable to use and great to work on – creating content was super simple.

Lolita Wang

MSI GT76

It really doesn’t get more “gaming laptop” than this.

Jack Jeffries

MSI GS75

As the Maserati or BMW of laptops, it would fit perfectly in the hands of a professional needing firepower under the hood, sophistication and class on the surface, and gaming prowess (sports mode if you will) in between.

Taylor Carr

MSI PS63

The MSI PS63 is an amazing laptop and I would definitely consider buying one in the future.

Christopher Low

Brother RJ-4230B

This small mobile printer is exactly what I need for invoicing and other jobs such as sending fellow tradesman details or step-by-step instructions that I can easily print off from my phone or the Web.

Featured Content

Product Launch Showcase

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?