Wanted: one CFO with mastery of tuna casserole and supermarket circulars.

Handspring

(HAND)

shares were tumbling 14% in intraday trading Friday after the handheld maker announced that its CFO would leave the company at the end of the current quarter and fiscal year. Wall Street was not just upset at having to replace Bern Whitney on its speed dial; instead, investors wondered how, exactly, his fill-in would become instantly adept at pinching pennies, negotiating deals with cash-starved telecom partners and balancing a robust cash burn with a dwindling supply of kindling.

Great benefits and all the free gadgets you can carry, if you're the candidate who can keep the company afloat.

The visionary management team of CEO Donna Dubinsky and Chairman Jeff Hawkins no doubt has its charm in Silicon Valley. But CFO candidates will have to be prepared to manage in the paper-napkin, no-frills vein of old-time tech start-ups. Handspring just pushed out its profitability projections by two quarters, meaning that the bake-sale cash accumulated at the end of calendar 2001 will have to stretch even further.

Handspring finished 2001 with $112.7 million in cash, following a well-timed December stock offering of 7 million shares at $5.50 a pop. Technology partner

Qualcomm

(QCOM) - Get Report

ponied up another $10 million for 1.8 million shares in the same quarter. That addition along with some odds and ends added almost $50 million to the coffers, nearly doubling the company's available cash not a moment too soon.

During the troubled third quarter of fiscal 2002, ended March 30, Handspring whittled its cash back to $93.6 million. The company widened its loss to $23.7 million on a 15% sequential drop in revenue during the slower post-holiday season. More distressingly, though, gross margins in the quarter tanked to an incredible 9%, compared with 32% in the third quarter of fiscal 2001, when business was healthy in comparison.

Another thing the CFO will have to keep in mind, however, is large cash collateral put down on two facilities the company is leasing, one its headquarters building. In a hangover of dot-com real estate days in Silicon Valley, Handspring secured the office space with $47.4 million in investments as collateral. When Handspring said it had $159 million in cash and investments at the end of March, that $47.4 million and another $3.3 million collateral account for other facilities were restricted. That is, those aren't stocks or bonds Handspring can sell to fund operations; it's currently illiquid security deposit material that Handspring can't access in a pinch.

It's a good thing Handspring cashed in on the early buzz surrounding its Treo combination personal digital assistant/mobile-phone device in December, because in the mid-April third-quarter report, Handspring pushed back expectations for the handset's revenue contributions. Discouraged investors exited the stock -- after starting the year at $6.71, Handspring shares are revisiting the low $2 range.

So the public markets will be closed to Handspring while the Treo timeline firms up. At the same time, however, it'll be burning more than $20 million in cash per quarter. It's a nice fixer-upper for some financial whiz looking for a challenge. Investors weren't so sure Friday that any old candidate would be up to the task.