Palm takes deeper breath; boosts stock offering, nets $83.9 million

Palm resold 23.13 million shares, as part of a follow-on offering it announced the previous day.

The company had initially anticipated offering only 18.5 million shares held by its investor Elevation Partners, but added more stock to the deal, which it priced at $6 a share.

Elevation received $49 million from the offering, while Palm in turn received $83.9 million.

Palm said it expects to use the proceeds to "strengthen its working capital position and to further bolster the resources it is devoting to the launch of the Palm Pre and future product-development efforts."

That's good, because with rumored delays and waning enthusiasm, Palm needs to buy itself more time...literally.

The full release, below:

Palm, Inc. (NASDAQ:PALM) today announced that it increased the size of its previously announced public offering of common stock to approximately 23.125 million shares, including approximately 18.5 million common shares underlying 49% of the units of Series C preferred stock and warrants acquired by Elevation Partners in January 2009. The public offering price per share will be $6.00. Upon the closing of the offering, Palm will receive net proceeds of approximately $83.9 million. Palm expects to use the proceeds to strengthen its working capital position and to further bolster the resources it is devoting to the launch of the Palm^(R) Pre(TM) and future product-development efforts.

The underwriters will also have a 30-day option to purchase approximately 3.5 million additional shares of common stock from Palm to cover over-allotments, if any.

Elevation Partners, which will recoup the $49 million it originally paid for the units, will use those funds to purchase approximately 8.2 million shares of Palm's common stock in the offering at the public offering price.

Palm shares rose as high as 9.5 percent to $6.59 in early morning trading.