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Palm News Roundup...

Wed Apr 14, 2010 - 6:29 PM EDT - By Annie Latham

Here is a quick rundown of Palm-related stories that seem to be coming in waves.

Palm stock jumped on Wednesday after Harbinger revealed its stake. Reuters reported the nearly 10% spike in Palm's stock price on Wednesday was due to the word that hedge fund manager Philip Falcone reported a 9.48 percent stake. Falcone's New York-based Harbinger Capital owns 16 million shares.


Jason Perlow, a blogger at ZDnet, wrote a story titled "Who should buy Palm? Intel, of course."

"Why does Intel need a smartphone OS? The same reason why Google needs Android, so they can be a developer of platforms to license out..."

"...webOS is a great platform in and of itself for basic PIM and smartphone functionality for the handset manufacturers and the carriers to heavily customize to their needs, but not as as a major development platform as it stands today. However, when used on a device with a hypervisor for functionality which would not otherwise be served by Android, Dalvik and Windows 7 Phone, in combination it has a great deal of potential."


eWeek had a story which discussed a number of options including HTC, Nokia and Motorola as suitors.

>> Morgan Stanley named Nokia and Motorola as being among the phone makers who could most benefit from acquiring Palm, according to an April 13 report cited by Bloomberg. Taiwan-based HTC and BlackBerry-maker Research In Motion were also mentioned as each being a possible “strategic fit.”

>> Jack Gold, of J. Gold Associates, said More likely suitors for Palm, wrote Gold, would be Chinese manufacturers ZTE or Huawei, which could "leverage both the Palm brand and its technology for both domestic and international market expansion." A Softbank or Access could also benefit from by licensing out webOS to OEMs.

>> Lenovo could be still another possibility, Gold wrote, though the timing likely isn't right, and Sony Ericsson, which has been losing market share, needs a great device and has "some very rich parents," was a possible "dark horse," though not terribly likely.


Therese Poletti's piece at Marketwatch.com pondered if Palm shares gotten too expensive for a buyout. Her story quoted Matthew Thornton an analyst with Avian Securities Inc., who said:

"If we were to use $6.50 a share, that inherently calls for a take-out value of $1.5 billion."

He noted that many estimates of Palm's current valuation do not factor in the preferred shares held by private equity firm Elevation Partners and stock options. "When you factor in the convertible preferred shares and options that are in the money, the price goes up fairly considerably," Thornton added.

Elevation, which counts U2 lead singer Bono as one of its investors, has about a 30% stake in Palm. "Obviously the run-up plays a factor in the negotiations," Thornton said.


Om Malik at GigaOm also pointed to the $1 billion number in his write-up which includes a tie-in with the New York Mets baseball team:

"At the risk of offending my friends who are fans of The New York Mets, I think the team makes an apt metaphor for Palm. Like the Mets, Palm inspires more hope than actual achievements. And just as the Mets bought ace pitcher Johan Santana and slugger Carlos Beltran and dreamed of a championship, Palm brought in former Apple executive (and all-star) Jon Rubenstein. But it didn't matter.

Nor did the $460 million that Elevation Partners has sunk into Palm. No amount of money is enough for this company. Why? Because you can't graft corporate DNA -- once a loser, always a loser.


So there you have it, some diverse views to digest this mid-week, mid-month day in April.


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