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  1. #41  
    Quote Originally Posted by aero View Post
    Lol. What else would he say? It is right out of orwell. It is obviously profoundly low amount of cash to support marketing and product support and ongoing development of a new OS, brand rehabilitation and new hardware.

    My ppoint was you claimed I was making assumptions.
    1) it is not an assumption that Palm is tapped out on credit markets. they are specifically constrained with agreements from current debt holders from the last time they restructured debt.
    2) They already used a last ditch method to wring the last bit of cash out of their equity. that is it there.
    3) their current cash burn is extremely high ration to cash.
    4) product launches of this type burn huge amounts of cash even in good market conditions.

    The reporting in the serious financial press about dell is serious. Does it make it a sure thing? no. does it mean Palm and Dell probably discuses this? Yes. Otherwise you would see direct denials
    good points all
    755P Sprint SERO (upgraded from unlocked GSM 650 on T-Mobile)
  2. #42  
    As for Dell buying Palm --

    If I'm Dell I want them -- a new, potentially successful product and ecosystem -- a product on which the spade work and germanization has been done -- with all that's needed for a flourishing success being a massive dose of fertilizer.

    If I'm Palm/Elevation Partners I'm scared -- I'm flatout of cash to bring this to fruition in the way I want to. If Dell offers enough cash to make us whole plus a meaningful profit, we're gone. (maybe a mixed cash/stock/warrant deal where EP etc can profit from a recovery in Dell's stock price because of the Pre.)

    As for culture clash ??

    Dell is a desperate company -- they are being squashed right now in their primary business: selling desktops to business.

    The economy sucks, businesses aren't ordering -- laptops, nettops, and netbooks are cannibolizing their profit streams --

    If Dell buys Palm they will leave it alone -- absolutely -- for at LEAST 2-3 years.

    They would not spend their capitol in this environment to acquire a company in order to crush it. They would embrace and assist it --while leaving it largely alone. (ie big incentive options for execs, designers who stay...)
    Last edited by BARYE; 03/29/2009 at 08:20 PM.
    755P Sprint SERO (upgraded from unlocked GSM 650 on T-Mobile)
  3. #43  
    Quote Originally Posted by BARYE View Post
    If Dell buys Palm they will leave it alone -- absolutely -- for at LEAST 2-3 years.

    They would not spend their capitol in this environment to acquire a company in order to crush it. They would embrace and assist it --while leaving it largely alone. (ie big incentive options for execs, designers who stay...)
    You might have a good point there - it seems they've remained fairly hands-off with Alienware.
  4. #44  
    Quote Originally Posted by BARYE View Post
    If Dell buys Palm they will leave it alone -- absolutely -- for at LEAST 2-3 years.
    Hey BARYE, what makes you conclude this? I ask, because I reached the opposite conclusion...

    ...and that was because companies are bought for the IP (patents, brand and such, of which Palm probably has plenty), maybe for the the physical assets (don't think Palm has much of it) and not so much for the people (who may quit at any time). Regarding the first point, they would want the patents more than the brand. I agree it would not be fashionable to kill Palm off immediately, but I imagine 2-3 years would be good enough time to declare that Palm was not performing under Dell's (or anybody else's) wings. As one of the previous posters in this thread pointed out, Dell is seen as a trading company, and Palm as a technology company (whatever the reality).
  5. #45  
    Quote Originally Posted by B-model View Post
    ...And Palm, as reported, is very tight on funds. so:
    * Dell wouldget into the business they are trying to enter quickly, w/ current produts and a brand new product Elevation partners would get paid...

    Um, if you've been paying attention, Elevation Partners pumped in their hundreds of millions when Palm was trading at $1-$1.50/share. By February, Palm stock was at $9, where it has stayed ever since.

    Elevation Partners has been paid handsomely. They might be the only geniuses in these awful economic times!
    -- Josh
  6. #46  
    Quote Originally Posted by GreenHex View Post
    Hey BARYE, what makes you conclude this? I ask, because I reached the opposite conclusion...
    Quote Originally Posted by BARYE
    If Dell buys Palm they will leave it alone -- absolutely -- for at LEAST 2-3 years.
    Quote Originally Posted by GreenHex View Post
    agree it would not be fashionable to kill Palm off immediately, but I imagine 2-3 years would be good enough time to declare that Palm was not performing under Dell's (or anybody else's) wings.
    Looks to me like you two have Come to the same conclusion: No real change for 2-3 years. Like I said in my previous post - it's been 3 years since Dell has purchased Alienware and it appears there's been no IP grab/people purge like your post infers would be the case with Dell.

    Quote Originally Posted by steinbej
    Elevation Partners has been paid handsomely. They might be the only geniuses in these awful economic times!
    There's plenty of companies performing better than Elevation Partners' companies right now. If you consider Elevation geniuses for what they've done with Palm, you must think the Walton family is made solely from Brainiacs!

    Oh, and Elevation pumped its first $325 Million into Palm in Oct 2007 when Pam was dropping from $17 to $9. Since the Elevation investment, Palm has vacillated between $5 and $8.
    Last edited by Kupe; 03/29/2009 at 08:47 PM.
  7. #47  
    Quote Originally Posted by steinbej View Post
    Um, if you've been paying attention, Elevation Partners pumped in their hundreds of millions when Palm was trading at $1-$1.50/share. By February, Palm stock was at $9, where it has stayed ever since.

    Elevation Partners has been paid handsomely. They might be the only geniuses in these awful economic times!
    Well, Elevation did the bulk of its investment in 2007 for the equivalent of $8.50 a share, so that part is just breaking even now. (Palm was at about $15 back then, but the stock price got cut in half as a planned part of the deal for whatever reason.) The extra $100M they put in was at $3.25, so that part paid off nicely.

    However, it's kind of moot because the event they're betting on hasn't happened yet. After the Pre launches and has been in the market for a couple of years (as well as other WebOS devices) we'll see where the stock price lands and how good a bet it was.
  8. #48  
    Quote Originally Posted by Kupe View Post
    Looks to me like you two have Come to the same conclusion: No real change for 2-3 years. Like I said in my previous post - it's been 3 years since Dell has purchased Alienware and it appears there's been no IP grab/people purge like your post infers would be the case with Dell.

    ...
    There is a big difference between a company that built a new mobile OS from the ground up then designed a cutting edge device to use it and a company that puts glowing alien heads on some big plasticky Clevo or Sager ODM laptop. What IP and key staff did Alienware have exactly?
  9. #49  
    Quote Originally Posted by GreenHex View Post
    Hey BARYE, what makes you conclude this? I ask, because I reached the opposite conclusion...

    ...and that was because companies are bought for the IP (patents, brand and such, of which Palm probably has plenty), maybe for the the physical assets (don't think Palm has much of it) and not so much for the people (who may quit at any time). Regarding the first point, they would want the patents more than the brand. I agree it would not be fashionable to kill Palm off immediately, but I imagine 2-3 years would be good enough time to declare that Palm was not performing under Dell's (or anybody else's) wings. As one of the previous posters in this thread pointed out, Dell is seen as a trading company, and Palm as a technology company (whatever the reality).
    Dell today is not the Dell of yesterday, Greenhex.

    Their hubris has become a memory. They are a chastened enterprise.

    They are burning through their cash hoard, scrambling to find a safe harbor from which to weather this current storm.

    Buying Alienware, introducing thin stylish laptops, exploring new lines of businesses like cellphones and (idiotically) music players.

    They have even brought forth their own version of a netbook -- something they did under duress -- and without desire or conviction.

    Michael has lost his confidence, his stock valuation, and much of his wealth.

    Dell is no longer in a "not invented here" mode -- if something appears to be working made somewhere else, they are more likely to adopt it than to quash it.

    Buying Palm now is a huge gamble -- one predicated on the Pre being wildly successful, and being the progenitor of a long lasting generation of phones, and of an ecosystem of devices, etc.

    Buying them now before the Pre gets introduced makes the deal possible and affordable for Dell -- and viable and desirable for Palm and EP.

    If the intro falls flat, their valuation and worth plummets. If the intro succeeds wildly, Dell would no longer be able to afford them, and Palm would no longer need them.

    Palm's IP is not worth the price of buying it, by any means -- palm is worth buying almost entirely because of what it hypothetically might become -- and most especially -- because of the designers who created this supposedly brilliant device and OS.

    Keeping them and their enthusiasm is what this transaction would be all about.

    My only question would be as to the premium Dell would have to pay to consummate this deal happily for all parties -- I'd guess a minimum of 30% -- with major apportionments for key designers etc.

    (BTW Greenhex, I was dissapointed that you did not engage with me on the Pakistan -Afghanistan Paradox thread)
    Last edited by BARYE; 04/01/2009 at 10:01 AM.
    755P Sprint SERO (upgraded from unlocked GSM 650 on T-Mobile)
  10. #50  
    Quote Originally Posted by bryanharig View Post
    There is a big difference between a company that built a new mobile OS from the ground up then designed a cutting edge device to use it and a company that puts glowing alien heads on some big plasticky Clevo or Sager ODM laptop. What IP and key staff did Alienware have exactly?
    Dell purchased Alienware's culture and therefore their customer base. Then they left that alone instead of turning Alienware into the gaming verion of the Inspiron. When you purchase a culture, keeping the people that created that culture is a priority. BARYE alluded to this in his first post - perhaps he was too subtle.
  11. #51  
    Quote Originally Posted by Kupe View Post
    Dell purchased Alienware's culture and therefore their customer base. Then they left that alone instead of turning Alienware into the gaming verion of the Inspiron. When you purchase a culture, keeping the people that created that culture is a priority. BARYE alluded to this in his first post - perhaps he was too subtle.
    Perhaps I was too subtle myself. I dont consider Dell's purchase of Alienware to be in any way comparable to a hypothetical purchase of Palm.

    You may not be aware of this but Alienware did not design any of their machines. They are primarily a marketing company. Clevo, Uniwill compal et al did the design and manufacturing. Alienware added a glowing alien head and some plastic cladding.

    Palm is a far more complex beast and its people, culture and way of doing things would be much harder to preserve.
  12. gbp
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    #52  
    Quote Originally Posted by BARYE View Post

    Buying them now before the Pre gets introduced makes the deal possible and affordable for Dell -- and viable and desirable for Palm and EP.

    Palm's IP is not worth the price of buying it, by any means -- palm is worth buying almost entirely because of what it hypothetically might become -- and most especially -- because of the designers who created this supposedly brilliant device and OS.
    Ypu have two good points, buying now is better, and betting on the hypothetical scenario is good.

    Future is going to be Mobile, if Dell wants a piece of that business , PALM is the best company they can buy.
    They cannot buy Microsoft
    APPLE, Nokia, RIMM and GOOGLE are

    The leftover i PALM
  13. #53  
    Quote Originally Posted by gbp View Post
    You have two good points, buying now is better, and betting on the hypothetical scenario is good.

    The future is going to be Mobile, and if Dell wants a piece of that business, PALM is the best company they can buy.

    They cannot buy Microsoft , APPLE, Nokia, RIMM and GOOGLE --

    The leftover is PALM
    normally the stock price of the acquiring company goes down at the anouncement of a merger.

    Were Palm to come back to 8, I could see an acquision with a 50% premium at 12+.

    Getting Palm at the right price, with terms that ensured the enthusiastic continuation of key designers, staff -- could potentially even raise Dell's stock value.

    It would need to happen soon though -- after launch is too late
    755P Sprint SERO (upgraded from unlocked GSM 650 on T-Mobile)
  14. #54  
    Quote Originally Posted by bryanharig View Post
    You may not be aware of this but Alienware did not design any of their machines. They are primarily a marketing company. Clevo, Uniwill compal et al did the design and manufacturing. Alienware added a glowing alien head and some plastic cladding.
    Um yes - Alienware designed all their own machines. Alienware built none of their own machines. This should sound familiar to you - it's precisely the Palm (and Handspring) business model with the Treo.

    Quote Originally Posted by bryanharig View Post
    Palm is a far more complex beast and its people, culture and way of doing things would be much harder to preserve.
    No more so than Alienware. Palm is a slightly below average technology company with high hopes of making a comeback. Alienware is a high-end gaming computer company competing in a saturated marketplace. Both companies have their merits - neither one is paticularly complex.
  15. #55  
    Quote Originally Posted by steinbej View Post
    Um, if you've been paying attention, Elevation Partners pumped in their hundreds of millions when Palm was trading at $1-$1.50/share. By February, Palm stock was at $9, where it has stayed ever since.
    NOt at all. As Greg points out:
    Quote Originally Posted by GregV View Post
    Well, Elevation did the bulk of its investment in 2007 for the equivalent of $8.50 a share, so that part is just breaking even now. (Palm was at about $15 back then, but the stock price got cut in half as a planned part of the deal for whatever reason.) The extra $100M they put in was at $3.25, so that part paid off nicely..
    What Greg leaves out is that the $100 million at $3.25, the potential profit on that was limited by a clause allowing remarket -- which palm exercised and which steeply cut elevation profit on that $100 million.

    Elevation profit has been greatly exaggerated.
  16. gbp
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    #56  
    Quote Originally Posted by BARYE View Post
    normally the stock price of the acquiring company goes down at the anouncement of a merger.

    Were Palm to come back to 8, I could see an acquision with a 50% premium at 12+.

    Getting Palm at the right price, with terms that ensured the enthusiastic continuation of key designers, staff -- could potentially even raise Dell's stock value.

    It would need to happen soon though -- after launch is too late
    understood , but I I see the stock going upwards of 20, provided PALM is planning few more phones based on WebOS.
    During the M&A time , DELL can ask the roadmap of future headsets and can bet on the stock now.
    More than the price of the stock , for DELL PALM can be used as a long term cash cow ( provided the team stays , the projects execute..... dadada).
  17. #57  
    Quote Originally Posted by Kupe View Post
    Um yes - Alienware designed all their own machines. Alienware built none of their own machines. This should sound familiar to you - it's precisely the Palm (and Handspring) business model with the Treo.

    ...
    Im sorry to be the one who spoils your vision of Alienware as some kind of pioneering laptop design company but it is what it is. The simple fact is that they do no design work beyond cosmetic details. They are a marketing company that offers their Taiwanese ODMs some minor input about the cosmetic look of 'their' laptops.

    Here are some links where you may learn a bit more about the issue:

    Original design manufacturer - Wikipedia, the free encyclopedia

    Also google for information on: Clevo, Arima, Uniwill, Quanta and Flextronics. The actual designers of 80+% of the laptops on the market.

    The Alienware m17 is a rebadged Arima/Flextronics W840-DI:

    List of OCZ Whitebook/Flextronics (Arima) W840-DI Vendors - Notebook Forums and Laptop Discussion

    The Area-51m 7700 is a rebadged Sager 9860

    The m17x is a Quanta Computer design.

    etc etc etc

    At this point I dont want to derail the thread any further so I will be ending my involvement in this. To put it simply: believing that "Alienware designed all their own machines" is completely wrong but exactly the perception they seek to create.
    Last edited by bryanharig; 04/01/2009 at 11:53 AM.
  18. #58  
    Quote Originally Posted by bryanharig View Post
    At this point I dont want to derail the thread any further so I will be ending my involvement in this. To put it simply: believing that "Alienware designed all their own machines" is completely wrong but exactly the perception they seek to create.
    Not to un-derail your derailing attempts, but it appears we're in agreement. The acquisition of Palm, a medium-sized, mediocre technology company, by Dell, a major low-margin computer company, would have no more impact on Palm than it has, so far, with Alienware, another medium-sized, mediocre technology company. Works for me.
  19. #59  
    Quote Originally Posted by bryanharig View Post
    Im sorry to be the one who spoils your vision of Alienware as some kind of pioneering laptop design company but it is what it is. The simple fact is that they do no design work beyond cosmetic details. They are a marketing company that offers their Taiwanese ODMs some minor input about the cosmetic look of 'their' laptops.
    Not really true, actually they are not just marketing ODM since they do some design specs themselves, and contract out manufacture (CM not just ODM).

    in other words -- pretty much just like -- PALM
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