U2's Bono gives iPhone rival a helping hand

SUNNYVALE, USA: Mobile manufacturer Palm, Inc announced recently that Elevation Partners, a venture capital firm that has U2 lead singer Bono as a managing director, has agreed to make an additional $100 million equity investment in the company.

Under the definitive agreement, Elevation will increase its investment in Palm by acquiring newly issued Series C preferred stock that is convertible into Palm common stock at a price of $3.25 per share, a 31 percent premium to the closing price of Palm common stock on December 19, 2008.

"The additional capital from Elevation Partners will enable us to put added momentum behind the new product introductions scheduled for 2009 and will provide us with enhanced stability in unsettled economic times," said Ed Colligan, president and chief executive officer of Palm, Inc.

"Elevation has been a great partner to Palm, and we appreciate their continued confidence and support."

The news of the investment coincides with Palm's efforts to make a competitor for iPhone.

Interestingly, Bono is an old friend of Apple's iconic chief executive Steve Job. iPhone had even launched a special U2 "(RED) iPhone" edition.

The decision of Bono to invest in a rival company comes at a time when Apple is passing through a tough time. Reports say that Bono has made the decision to invest in Palm because his relation with Steve Jobs has soured.

The transaction is expected to close by January 31, 2009, subject to customary closing conditions.