Handspring spreads its financial wings
The Visor maker will get $10 million from Qualcomm through a stock purchase and will also offer $38.5 million in new stock to the public.
The maker of Visor handhelds said in a statement that it would use the cash for "general corporate purposes," which could include investments in new technologies and acquisitions of "complementary businesses."
San Diego-based Qualcomm, which makes, develops and delivers digital wireless communications products based on CDMA (code division multiple access) networks, will buy slightly more than 1.8 million shares in Handspring for $10 million, according to the statement.
Qualcomm Vice President Dick Grannis said the company made the investment in the "hopes to see the launch" of a Handspring device that uses Qualcomm's products.
Handspring shares fell precipitously this year but rebounded recently after the company announced its upcoming Treo, a combination cell phone and handheld device. The company's stock reached a 52-week high of $52.25. Shares are up nearly 20 percent, or $1.20 per share, to $7.32.
Versions of the Treo that will run on GSM (Global System for Mobile Communications) networks are due out in the United States in January. Handspring is also working on a CDMA version of the Treo.
Mountain View, Calif.-based Handspring will offer 7 million extra shares to the public for $5.50 apiece. Handspring stock closed Tuesday at $6.12.
The company recently reiterated plans to become profitable during its 2002 fiscal year, which begins in July.
Both the Qualcomm sale and the stock offering are part of a $7 million shelf registration the company filed with the Securities and Exchange Commission last week. Shelf registrations allow companies to register to sell shares of stock up to two years in advance without having to specify exactly when the stock will be sold or how much it will be sold for.
Handspring has been working to strengthen its relationships with wireless companies. It recently announced an agreement with software maker Neomar to jointly market and sell Neomar's software as well as Handspring's Treo.
And earlier this month, Handspring announced a deal with Infowave that would give corporate customers secure wireless access to various types of corporate data using Handspring's Treo and Visor handhelds.
Handheld rival Palm also received additional funding, $50 million, earlier this month, from an unnamed investor. Shortly thereafter, Palm announced that it had chosen chipmaker Texas Instruments as its "preferred" but nonexclusive supplier for chips to be used in upcoming wireless devices.
Staff writer Richard Shim contributed to this report.