Palm, Inc. (NASDAQ: PALM) stock is indicated lower on word from the company that it is exercising its right to re-market approximately 18.5 million common shares underlying 49% of the units of Series C preferred stock and warrants which were acquired by Elevation Partners in January 2009.
Elevation Partners will recoup the $49 million originally paid, and it expects to use those funds to purchase shares of Palm’s common stock in the offering at the public offering price.
If this remarketing is completed, Palm will receive all net proceeds in excess of $49 million and the funds will be used to strengthen Palm’s working capital position and to bolster its ongoing development program.
The underwriters will also have the right to purchase an additional 2.8 million common shares from Palm to cover over-allotments, if any.
Shares were originally down almost 8% at $5.67 in pre-market trading, but shares are down about 6% at $5.80 now on last look.
JON C. OGG
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