Last week we reported that Palm was running out of cash fast, having only $220 million or so in reserve which some cocktail math might lead some to believe that they only have at most three quarters of solvency left. As we briefly mentioned in that story, Palm is dealing with the situation by remarketing some of their Series C Stock and warrants acquired by Elevation in January. They're looking to remarket about 18.5 million shares, which they're hoping will net them $49 million in additional cash. Of course, if the stock market decides to have a conniption fit on any given day, Palm reserves the right to scuttle the plan until things chill out.
That vision you're having of a bruised and battered fighter, knocked down and woozily opening his eyes as the ref slaps "Eight!" on the mat, then clawing his way up the ropes and staggering around until, at long last, he finds his feet and summons up his last, heretofore unknown reserve of strength for One Final Punch ....it's a little melodramatic. So cut it out.
It's not wrong, though.
Comments
Love the picture. "Adrienne!"
I hope this is enough to keep Palm going until the release of the Pre. Also, hopefully the Treo Pro's availability on two networks will give them an infusion of money to keep going.
I absolutely love my Centro and the past Palm products I've owned and I hope Palm achieves success with the Pre.
I did my part, i just bought a Treo Pro.
Palm's a survivor
I'm gonna go out on a limb and say Palm needs more cash infusion than this.
Elevation has already provided a boatload but their well may have already run dry.
What Palm needs to do is hurry and get the Pre to market. The only problem is that rushing a halo product to market can be disastrous. Just look at what happened with the Blackberry Storm.
What to do. What to do...
Note that Palm's balance sheet was pretty healthy before it chose to give over $900 million in dividends to investors a year and a half ago (funded by in parts by an investment from Elevation Partners, an issuance of debt, and its own cash reserves).
Though it looks like Palm is struggling, this was actually a financial engineering move designed to give Elevation Partners and other investors much better returns by increasing risk. This is how people like Fred Anderson make lots of money.
900 million? good try.
Thanks. That was correct.
remember every knock down is not a knock out...
Palm has out-visioned and out-designed Apple. That is their One Final Punch.
Palm-p-p-palm p-palm-p-palm P-palm-palmmmm, p-palm-pammmm!
Sorry, couln't resist. :-(
D, putting more shares on the market dilutes the stock and is considered a negative impact on the stock. So, I really dont see this as a positive other than it keeps Palm alive till the June 29th Pre Release. And they better sell a lot and fast or McNamee will be cutting a lot more than his hair!
Joeg
"Of course, if the stock market decides to have a conniption fit on any given day, Palm reserves the right to scuttle the plan until things chill out."
The market doesn't respond with a "conniption fit," they respond to remarketing by devaluing all the stock out in investors hands.
What Palm needs to do is "leak" a release date for the Pre. I understand the need for testing a product before release but Palm is in the 12th round. They can't afford to continue to leave consumers guessing because that may cause lack of interest especially if another nice product in introduced by a rival company.
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