Investor Buys 1.2 Million Shares of Palm

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Palm announced on Friday that it has issued 1.2 million shares of its stock at $15.90 a share to an institutional investor. This $19.1 million equity offering, which amounts to 4 percent ownership of the company, comes less than a month after another institutional investor paid $18 million, or $15 a share, for 1.2 million shares.

Palm refused to release the names of either investor but did state that the proceeds of the stock sale will go towards general corporate expenses incurred by its Palm Solutions group hardware unit, soon to be renamed palmOne.

In the next few months, Palm will split into two companies: palmOne, which makes the handhelds, and PalmSource, which develops and licenses the Palm OS. It is also in the process of acquiring Handspring, which will become part of palmOne.

Palm ended its last financial quarter with $242.4 million in cash and cash equivalents. Of course, this amount will be split between the two new companies.

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