Palm wins $50m investment
Mystery investor
Posted in Business, 7th December 2001 16:31 GMT
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A mystery investor has sunk $50 million into Palm.
The investment, made in the form of a purchase a single $50 million convertible note. After five years, the note can be turned into common Palm stock at $4.63 a pop. If, after a year, Palm's stock rises above $7.13 and stays there for an agreed period of time, the company can insist that the note be converted.
In the meantime, the note pays five per cent interest, which isn't at all bad given where bank interest are now and that they're likely to fall again while the Federal Reserve continues to attempt to suppress the recession in the US.
Palm's interim CEO and chairman, Eric Benhamou, claimed the investment demonstrated "a high level of external confidence in Palm". For a good return on the investment, Palm's share price does have to rise from, its current price, $3.66, to over $4.63, a gain of around 26 per cent. ®
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