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  1.    #1  
    Major Palm Shareholder Urges
    Board to Consider Sale of Firm

    Staff Reporter of THE WALL STREET JOURNAL
    February 2, 2006; Page B3

    One of the largest shareholders of Palm Inc. has sent a letter to the board of the maker of hand-held devices urging directors to explore a sale of the company.

    Mark Nelson, a private investor who owned nearly 3.3 million shares, or 6.6% of Palm, according to a Securities and Exchange Commission filing in August, sent the letter recommending a possible sale to the board of the Sunnyvale, Calif., company on Tuesday.

    Mr. Nelson praised Palm's management in his letter, but he said the company is in a competitive market that faces "slowing innovation, commoditization and choked margins." As a result, Mr. Nelson wrote, Palm should "explore strategic alternatives, including a sale of the company."

    A Palm spokeswoman declined to comment. A spokesman for Mr. Nelson said he hadn't heard from the Palm board.

    The letter isn't the first message from a big shareholder to the board of Palm, which makes the Treo smartphone and hand-held computers.

    In November, another major shareholder of Palm, Swiss hedge fund Sagio Investments SA, wrote a letter to the board decrying the company's stock price at the time. Palm later said its chief financial officer, Andrew Brown, had spoken with Sagio executives.

    According to SEC filings, Sagio owns around 2.5 million shares of Palm, or about 5% of the company's shares. Fidelity Investments is Palm's largest shareholder, with nearly seven million shares, or about 14%, according to the filings, followed by OppenheimerFunds with 4.5 million shares, or 9%.

    Mr. Nelson's letter comes at a time when Palm's stock has been rising. The stock has recently traded at around $40, up from around $26 a year ago.

    Palm shares rose 34 cents, or 0.9%, to $39.82 in 4 p.m. composite trading yesterday on the Nasdaq Stock Market.

    Palm has also recently introduced several new products, such as a Treo smartphone that uses Microsoft Corp. software.

    In his letter, Mr. Nelson acknowledges the rising share price of Palm and says the company is "in the ascendant." But he argues that Palm, which is one of the smallest players in a cutthroat cellphone market that is dominated by giants like Nokia Corp., faces such intense competition and likely commoditization that these "overwhelming market forces will render insignificant steps this [Palm] or any management can take."

    Mr. Nelson, 48 years old, who is based in northern California, was chief executive and founder of Ovid Technologies Inc., a medical-software provider. Mr. Nelson sold Ovid to Dutch company Wolters Kluwer NV in 1998 for around $200 million.

    He has since become a private investor, buying into Palm in early 2004 when the stock was trading at around $10 a share.
  2. #2  
    Bump. I really think this post should get more recognition. Palm needs to just go away already.
  3. #3  
    Of course he's urging it.

    Sell now before the crash and burn. (the Treo HW design is the only thing of value at Palm).
  4. #4  
    Well it is an incredibly competitive market. I think Palm will be ok though. Keep the pdas priced relatively low (compared to ppcs) and just keep making the Treo better and better.
    Palm III-->Palm IIIxe-->Palm 505-->Samsung i300-->Treo 600-->PPC 6600-->Treo 650-->Treo 700wx-->BB Pearl--> BB Curve

  5. #5  
    Quote Originally Posted by CmdrGuard
    Bump. I really think this post should get more recognition. Palm needs to just go away already.
    It's being discussed quite a bit in another thread.
  6. #6  
    Quote Originally Posted by CmdrGuard
    Bump. I really think this post should get more recognition. Palm needs to just go away already.
    I think people who don't have anything to say useful when it comes to Palm/Treo should go away. This IS a forum specifically about it.

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