Palm Pulls in $84 Million in Stock Sale

Palm and Elevation Partners sold off about 23 million Palm shares this week, netting the smartphone maker $83.9 million. The company will use this money to keep afloat as it prepares for the launch of the Palm Pre, its highly-anticipated new phone.

Elevation Partners is a private equity firm that is by far the largest single investor in Palm. Early this year, a deal was worked out in which Elevation Partners would invest $49 million in Palm in return for stock at the then current price of roughly $3 a share.

This week, these shares, and some additional ones, were sold at $6 a share, reflecting how much Palm's share price has risen since the announcement of the Pre. Palm pulled in the $83.9 million, while Elevation Partners recouped its $49 million.

Palm says it will use this money to "bolster the resources it is devoting to the launch of the Palm Pre and future product-development efforts." Since the announcement of the Pre, and that this company is dropping its use of the Palm OS, sales of its current models have dried up, greatly reducing revenue.

Since this stock sale was announced, Palm's share price has risen strongly, closing yesterday around $7.40.