NEW YORK (AP) — Shares of smartphone maker Palm jumped this morning after the company said it planned to raise $83.9 million with a new stock offering.
Palm said Monday it boosted the public offering to 23.125 million shares from 18.5 million and priced the stock at $6.
In a note to investors today, Morgan Keegan analyst Tavis McCourt called the offering "unfettered good news for Palm shareholders, who obtained a significant boost to near term liquidity" while seeing their holdings diluted by only about 4 percent.
Palm shares shot up 66 cents, or 11 percent, to $6.68 in morning trading.
Analysts have questioned whether the Sunnyvale, Calif., company's cash flow could sustain the rollout effort for the widely anticipated Palm Pre, a new smartphone set to launch in the first half of the year. Shrinking demand for Palm's older models has battered the company's sales.