Palm in an Apple, Bono threesome
Thanks to Howard for pointing out that Palm had sold $325 million stake to Elevation Partners (that’s Bono’s investment company, don’tchaknow). In addition to the money they’ll get Jon Rubinstein (who was the head of the iPod division at Apple) as their executive chairman of the board. If you ask me that’s something that they really needed.
I’d say this injects a little hope into my otherwise despondent view of the company. If they fire Ed Colligan, I’d be even more hopeful. I think the money (in addition to the $325, they can take on up to $400 million new debt) buys them more time and hopefully they can come up with a decent product now that someone competent is helping out at the top.
It’s possible that the Foleo could morph into something interesting - if Palm starts viewing it as a personal server and things like phones and mp3 players or ebook readers as clients - so there’s a bunch of storage and horse power on the foleo and you have these peripherals that can pull apps and files directly off that as though they were on some local storage. Even apps could be client/serverized with some enhanced functionality when you are within range of your Foleo device - kinda like X11 but better. As it is, the Foleo seems largely uninteresting.
Who, knows? The Shadow does, if no one else. At any rate, I’d guess if anything good comes of this it’s a few years down the road.
UPDATE: Thanks to mhurdman for pointing out that they are not actually keeping any of the money they have raised. So much the opposite that they are taking all the money from equity and debt and throwing in a few hundred million of their own money and giving it out to shareholders. I didn’t think that Palm was one of those companies that was sitting on a mountain of cash (someone correct me if I’m wrong), so I’m not sure what’s going on here. A hefty cash infusion and new leadership could have let them do some heavy duty R&D. Now, they’re poorer and more in debt. I guess they have new leadership which is good, but the news seems a lot less good to me than it did. Unless Bono decides to buy them outright, fire Colligan and do some heavy duty work with the company, I’m much more pessimistic than I was when I first heard the news.
June 4th, 2007 at 4:13 pm
Oops. They’re using the cash AND the debt for a special one-time distribution of cash to shareholders. So it doesn’t really buy them time.
June 4th, 2007 at 4:19 pm
Wow, thanks for pointing that out. I reread the release more closely and see their giving out $940 million, which seems to be more than the $725mil they’re taking in equity and debt. Is Palm sitting on a mound of cash? I hadn’t thought that they were. I wonder if I was being to optimistic and if this is actually a last gasp? I’d feel better if they were going completely private. Urgh…
June 5th, 2007 at 7:58 am
I really hope Hawkins isn’t still putting all his eggs in one basket with the Foleo.
http://www.brighthand.com/default.asp?newsID=13071
July 6th, 2007 at 10:42 am
[...] could be talking about what it means to have the investment by Elevation Partners. How having those new folks on the board is providing them with some direction or some whatever. Or [...]
December 11th, 2007 at 11:26 am
[...] other hand Barron’s is bullish on the company. The thesis they’re pushing is that since Elevation Partners invested in them and put some new blood at the top of the pyramid that things are getting ready to [...]