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  1.    #1  
    Hi all, If Elevation Partners back Palm so should we! Take care, Jay

    Investor Elevation Partners backs Palm, despite woes

    Investor Elevation Partners backs Palm, despite woes | Reuters

    Fri, Mar 19 2010
    * Elevation sees great opportunity for Palm

    * says Palm management working through challenges

    * Palm shares fall 29 pct to 14-month low on weak outlook

    By Franklin Paul

    NEW YORK, March 19 (Reuters) - Palm Inc's <PALM.O> most influential investor, Elevation Partners, stood by the smartphone maker on Friday, even as other shareholders bailed and analysts warned its days as an independent company may be numbered.

    Palm shares tumbled 29 percent on Friday to a 14-month low as investors questioned its ability to compete in a tough smartphone market against Apple Inc <AAPL.O>, Google Inc <GOOG.O> and Research in Motion <RIM.TO>. [ID:nN19134642]

    The sell-off was sparked by Palm's warning that its current-quarter revenue would be far below Wall Street's expectations [ID:n18254531] -- the company's latest misstep after posting net losses for two fiscal years. [ID:n18254531]

    But Elevation, which bought a 25 percent stake in Palm for $325 mln in 2007, said the smartphone maker still has "enormous opportunity" and backed its management led by Chief Executive and Chairman Jon Rubinstein, a former member of Elevation who is also famous for developing Apple's iPod.

    "Jon and his team have built the best mobile operating system available today and they are now working through short-term execution challenges with Elevation's complete support," Elevation said through a spokesman.

    Elevation, a private equity firm that includes U2 lead singer Bono among its partners, has made three more investments in Palm since its initial deal, buying common stock, convertible preferred shares and warrants.

    Elevation, which now controls roughly 30 percent of Palm, has also named former Apple executives Fred Anderson and Roger McNamee to Palm's 7-member board.

    While Palm's share price has plunged 72 percent since the first deal in June 2007, the value of Elevation's investment has been maintained by the terms of the original deals.

    Palm's filings show that Elevation has invested a total of $460 million in the company, an investment that is worth $432 million today based on Friday's close of $4.00.

    QUESTIONS ABOUT ITS FUTURE

    Few Wall Street analysts share Elevation's optimism on Palm, whose relatively small size means it does not have the same leverage with retailers or phone carriers as an Apple or Nokia <NOK1V.HE> or Motorola Inc <MOT.N>.

    Kaufman Bros analyst Shaw Wu cut his rating on the shares to "sell" from "hold."

    "While we believe Palm has some value with its webOS (phone operating software platform) ... we are unsure of the company's prospects as an ongoing concern," he said in a client note.

    Morgan Joseph analyst Ilya Grozovsky estimated the company may only have enough cash to operate through the middle of 2011, given its expenses and persistent losses.

    Canaccord Adams analyst Peter Misek said Palm's troubles will likely accelerate as its partners question the company's solvency and withdraw their support.

    Palm has for years been seen as a takeover target, with Microsoft Corp <MSFT.O>, Nokia <NOK1V.HE> and Dell Inc <DELL.O> often mentioned as potential suitors which may be attracted to webOS, Palm's mobile phone operating system software.

    "The problem is they have shareholders too, and they would be looking at how they can make (a deal) profitable," said C.L. King and Associates analyst Lawrence Harris. "Palm has not been able to get traction in the U.S. market with their two largest customers, so where is the value with webOS? It is neat software which has not proven to be compelling."

    On Thursday's conference call Palm's Rubinstein responded to a question about a potential acquisition by saying: "We are a public company. And if there's a reasonable proposal, of course the Board has to consider it."

    "But, that being said, our focus since the day I arrived here, and that's almost three years ago now, is to build a great Company with a great mobile platform and great products. And that has been our focus."

    He added that the company is working to address its problems. It has upgraded the software to improve speed and battery life, boosted its advertising, and is working to train retailers to better show customers why they should buy Palm phones over its rivals.

    Rubinstein also mentioned that the company would introduce a new product this year, but provided no specifics.
    Please Support Research into Fibromyalgia, Chronic Pain and Spinal Injuries. If You Suffer from These, Consider Joining or Better Yet Forming a Support Group. No One Should Suffer from the Burden of Chronic Pain, Jay M. S. Founder, Leesburg Fibromyalgia/Resources Group
  2. #2  
    The Palm market cap is now about $645 million. That's chump change to most companies. Microsoft could buy it just to ensure competition, even while continuing to promote Win 7 Phone. Samsung could buy it for WebOS, and use the OS in future smart phones. Dell could buy it, but they would screw it up. LG might be able to absorb Palm.

    It is not a good fit with RIM or Nokia, because of their competing technology. Qualcomm doesn't want to PO other manufacturers. Carriers don't want to own a cell phone company. So, there are very few potential white knights. Sadly, the smart money is on WebOS going the way of betamax.
  3. #3  
    I'd vote for Sony, HP, or HTC. Heck, HTC could buy Palm, get their patent portfolio to help in the fight against Apple, and stick webOS on one of the 4,237 devices they're making with probably very little work. They wouldn't even have to mess with the Sense UI crap. Would that make them a competitor to their other customers? Probably, which could be an issue. Hence, the difficulty in actually predicting what might happen here.
    Treo 600 > Treo 650 > HTC Mogul (*****!) > HTC Touch Pro (***** squared!) > PRE! > Epic
  4. #4  
    Great another thread to support PALM!!!! keep it up.....
  5. gbp
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    #5  
    Sony gets my vote. Its good for us the customers , stock holders, Elevation partners and good for Sony. Sony needs a software platform. I wish they were tired of the Symbian/WinMo/Android combo. They can leave Ron & Co and move their smart phone platform to WebOS.The dumb phones can use symbian. They make solid hardware all they need is software and they got one. Plus they can even introduce a new Tablet.

    Tell you , thats a one damn goooood acquisition. Think about all those 3D games made for iPod / iPhone available for webOS. Apple will be threatened. They can lock their platform , but cannot force the developers to port the games to webos. Plus that little matter of Patents will help Sony fight Apple.
  6.    #6  
    I agree with all of you Palm is not dead. I cannot get a Pre until my Centro contract ends in Oct. I am SURE there will still be a webOS & Palm then!
    Please Support Research into Fibromyalgia, Chronic Pain and Spinal Injuries. If You Suffer from These, Consider Joining or Better Yet Forming a Support Group. No One Should Suffer from the Burden of Chronic Pain, Jay M. S. Founder, Leesburg Fibromyalgia/Resources Group
  7. #7  
    Sony also has a history with Palm, having made what was arguably the best PalmOS hardware device in the Clie. Again, I'm still hoping Palm can pull it around and survive on their own, but there are some interesting acquisition possibilities.
    Treo 600 > Treo 650 > HTC Mogul (*****!) > HTC Touch Pro (***** squared!) > PRE! > Epic
  8.    #8  
    I agree I would prefer Palm manage on it's own, however, Sony does have history and there are others out ther who are interested as well. Besides, I would think Palm's patents must be worth a lot. After all, there is so much you can do with a hand held device without stepping on someone patents!
    Please Support Research into Fibromyalgia, Chronic Pain and Spinal Injuries. If You Suffer from These, Consider Joining or Better Yet Forming a Support Group. No One Should Suffer from the Burden of Chronic Pain, Jay M. S. Founder, Leesburg Fibromyalgia/Resources Group
  9. #9  
    Elevation Partners, which has a history of selling off their bad investments, is not about to say bad things about Palm if they're going to sell it.
  10. #10  
    Palm should come out with a U2 Special Edition in honor of Bono like Apple did with the iPod and T-Moble did with the Fender edition myTouch. I could boost sales or at least draw more attention to the phones.
    "Patience, use the force, think." Obi-Wan


    Ready to try Preware? Get this first: Preware Homebrew Documentation
  11.    #11  
    Hi all, Well time will tell and I still think Palm and webOS will be here to stay!
    Please Support Research into Fibromyalgia, Chronic Pain and Spinal Injuries. If You Suffer from These, Consider Joining or Better Yet Forming a Support Group. No One Should Suffer from the Burden of Chronic Pain, Jay M. S. Founder, Leesburg Fibromyalgia/Resources Group
  12.    #12  
    As a matter of fact, all of U2 should use them, when ever they are in country that supports phones made by Plam and mention it all of the time!
    Please Support Research into Fibromyalgia, Chronic Pain and Spinal Injuries. If You Suffer from These, Consider Joining or Better Yet Forming a Support Group. No One Should Suffer from the Burden of Chronic Pain, Jay M. S. Founder, Leesburg Fibromyalgia/Resources Group

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