Elevation Partners are the largest investor behind Palm and knowing that the reeling company had a winner in the Palm Pre, they dumped $100 million into the company this past December to help them stay afloat. Now Palm is urging the company to publicly sell $49 Million they originally purchased in stocks at their current market value of $105 Million. Not only would Elevation Partners get their investment back but the company would receive some much needed financial stability as they wait for their prized Palm Pre to launch.

Last week the company announced weaker than expected quarterly revenue because of their dated offerings but all that should change over the next 9 months as Palm steps up their game to compete with Apple, BlackBerry and Android.

Elevation has invested $425 Million in the company to date. According to some, this public offering could dilute the number of outstanding shares and the market responded by dropping the stock price 8% to $5.65. Fortunately, that’s still well above the original stock price before the Palm Pre was announced.

[Via Reuters, The Street]