Palm has raised $83.9 million courtesy of a public offering of 23.12 million shares at $6 each. With the move Palm has almost replaced the cash it burned in its fourth quarter.
The company said Monday that it was aiming to raise $49 million, but the offering was oversubcribed allowing Palm to raise more money. The initial $49 million offering consisted of 18.5 million preferred stock and warrants acquired by Elevation Partners in January.
Optimism about the Pre's prospects have enabled Palm to replenish its cash.
Palm's $49 million capital raise would have been a big help, but the $83.9 million tally is significant for the company. Why? As demand fell off a cliff last quarter ahead of the launch of the Pre, Palm burned through $95 million to $100 million. With the cash it raised, Palm has almost patched that hole in its pocket.
In a statement, Palm said it will "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."
Palm isn't completely out of danger, but the Pre has enough buzz to allow the company to raise cash via public offerings. With one more quarter of pain before the Pre makes a difference, Palm may need to raise more cash down the road.