Palm receives $100m stocking filler

 

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By Stuart Turton

Posted on 23 Dec 2008 at 13:52

Palm has received a $100 million cash injection from an investment firm, as it gears up to launch its new Nova mobile operating system.

The stocking filler comes courtesy of Elevation Partners, the investment firm established by U2 front man Bono.

The $100 million pushes the partners stake in the smartphone maker up to 39%, and the investment company says the infusion is intended to help Palm push forward with new product developments during the economic downturn.

The investment is the second large injection by Elevation Partners, which purchased a 25% stake in the company last year for $325 million. Alongside the cash, the investors also placed Jon Rubinstein, the former iPod Apple executive, as Palm's executive chairman of the board.

Palm retains the ability to make Elevation sell up to $49 million of the new investment to other shareholders at the same price or better terms by 31 March.

The two companies are banking on Nova, the operating system built to appease the "fat middle" of the consumer market, to take 2% of the smartphone OS market.

"We believe that Palm is in a position to transform the cell phone industry, and we are pleased to have the opportunity to make this additional investment in the company," says Roger McNamee, co-founder of Elevation Partners.

"Palm has an industry-leading team and an exciting, differentiated product roadmap. We are proud to be associated with the company and look forward to great things from Palm in 2009 and beyond."