Palm raises $313m in share issue

On Wednesday, Palm announced it had raised $313m from its public offering of 20 million shares. Palm shares showed strong demand by pricing at $16.25 a share.

Last week, Palm said it would float more shares to bolster its cash position. When the company delivered its first-quarter results, shares bounced around in the $14 (£8.63) to $15 range. All things considered, Palm’s pricing statement was about as good as it gets.

Palm added that its underwriters — Goldman Sachs, JP Morgan and RBC Capital — have a 30-day option to buy three million additional shares. If that option is exercised, Palm stands to acquire a few more dollars out of the deal.

Many companies including banks, airlines and a bevy of others have used the recent stock market run-up to float more shares and bolster their balance sheets.

Palm said it will use the proceeds for working capital and general corporate purposes. As of 31 August, Palm had $212m (£131m) in cash and short-term investments. The additional $313m will come in handy as the company aims to roll out more WebOS devices.