Handspring to raise $48.5M from Qualcomm, shares

Handheld device maker Handspring Inc. announced both the public offering of 7 million shares of stock on Wednesday, as well as a US$10 million investment from Qualcomm Inc.

The new shares of stock became available yesterday, at US$5.50 per share, $1.51 less than the $7.01 closing price of Handspring's (HAND) stock on the Nasdaq Wednesday. The stock sale will raise $38.5 million for Handspring.

In addition, wireless communications company Qualcomm has agreed to purchase more than 1.8 million shares of Handspring stock, for a total of $10 million, Handspring said in a statement.

Qualcomm made the investment to drive demand for wireless Internet services and to increase the use of CDMA (Code Division Multiple Access) technology worldwide, said Bertha Agia, a spokeswoman for the company. Qualcomm made a $300 million investment in bankrupt wireless company NextWave Telecom Inc. earlier this year to help the company build a 3G (third-generation) wireless data network using Qualcomm's CDMA technology.

Handspring endorses CDMA devices for its Visor handhelds, including a module offered by Sprint PCS Group that allows customers to use Visors for both phone and wireless Internet access.

However, Handspring's own recently announced Treo, a combination handset and PDA (personal digital assistant) will use GSM (Global System for Mobile Communications) technology, with upcoming software that will allow users to upgrade to GPRS (General Packet Radio Service) services. Qualcomm's Agia would not comment on whether the company expected Handspring to release a CDMA version of the Treo.

Handspring will use the money raised by the offerings for "general corporate purposes," which may include investments and acquisitions, Handspring said.

Both transactions were filed under a shelf statement with the U.S. Securities and Commission last week, the company said.

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