Palm (NSDQ: PALM) has announced it will raise money by exercising its right to remarket approximately 18.5 million common shares—the 49 percent of Elevation Partners’ last investment that Palm reserved the right to force them to sell. Palm will effectively raise some money through the market without issuing new shares, instead reselling shares it had sold to Elevation. This is 49 percent of the Series C preferred stock and warrants Elevation obtained, and if the remarketing goes ahead (it’s subject to market conditions), Elevation will get the $49 million it paid and Palm will get the rest of the profits.

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Palm will use the money to strengthen its working capital and to launch its Palm Pre product. Elevation Partners indicated it expects to use the money it gets back to buy shares of Palm’s common stock at the public offering price. The move was brought up last week when Palm pre-announced its third-quarter results, which warned revenues would fall between a disappointing $85 million and $90 million. (release)