Palm, Inc. for Sale?
According to a recent Wall Street Journal article, Palm, Inc. engaged Morgan Stanley to advise the company about options for its strategic sale. Meanwhile, speculation in the community is rampant about Palm’s future. Will it continue as an independent company? Are mobile phone giants Nokia, Motorola, HTC and Samsung likely buyers of the firm?
In the presence of mytreo.net, Palm’s CEO Ed Colligan told the Associated Press at the Digital Life conference in New York a few months ago that he was not in talks with prospective buyers, and that he wished to keep the company independent. Some of Palm’s largest shareholders have become nervous about competition in the marketplace, and have called on him to consider a strategic sale. The involvement of Morgan Stanley may be the first concrete sign that top management is giving in to shareholder demands.
Palm’s stock was up nearly 11% on Friday in part due to speculation about a strategic sale. Palm has a market capitalization of less than $2 billion and is cash rich, making it an easy purchase for a mobile phone conglomerate, which generally have market capitalizations of at least ten times Palm’s amount. With Apple Computer’s announcement that they are entering Palm’s Treo smartphone market with their potentially competitive iPhone, its easy to understand why some Palm shareholders might opt for a quick buck, set the stock in play and allow rumors to circulate.
Although the acquisition of Palm by a larger player would potentially give the company greater resources for research & development and provide manufacturing synergies, we wonder about the impact of adding a layer of management on top of a tremendous existing team. Palm has shown itself to be a successful standalone company with competent, effective and aggressive leaders. We at mytreo.net believe Palm is more likely to succeed for shareholders and consumers alike as an independent entity.
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Filed under: Editorials
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As a Palm user for many years I begin to shake when I hear of another change in ownership. Shortly after my purchase of he I705 (a really great unit with e-mail capability) I, and many others, received a letter saying that Palm was not offering e-mail service any longer. So here I was, stuck with a $300.00 non e-mail PDA.
Now, I just purchased ($399) a Treo 680 from Cingular. If this “sale” goes through I and many other Treo users may be left in the lurch again. Way to go Palm. This will be my last Palm purchase and I hope that anyone else considering a purchase think twice about ongoing support.
As a Palm user for many years I begin to shake when I hear of another change in ownership. Shortly after my purchase of he I705 (a really great unit with e-mail capability) I, and many others, received a letter saying that Palm was not offering e-mail service any longer. So here I was, stuck with a $300.00 non e-mail PDA.
Now, I just purchased ($399) a Treo 680 from Cingular. If this “sale” goes through I and many other Treo users may be left in the lurch again. Way to go Palm. This will be my last Palm purchase and I hope that anyone else considering a purchase think twice about ongoing support.
Have you seen the New Blackberry 8300 ? Holy smokes it is a total knockoff of the treo!!!
This ought to be proof to shareholders that palm in on the right path. 90% of their success will come from execution at this point. Palm needs to fix the glitches and problems people are perceiving with the palm product line.
Before the analyst quote from this link, check out _this_:
“The good news is the smartphone market continues to grow and Palm co-founder Jeff Hawkins claims the company has a top-secret product in the wings.”
Geoff Blaber, research analyst at IDC, cautioned that, “Whoever acquires Palm also inherits a handheld business which is struggling and…Palm itself is struggling. Anyone who’s going to take on Palm has got to have a strong play already in the enterprise space. [Palm’s] software expertise is very strong particularly as, at the moment, Windows Mobile is very competitive and anything that can be done to add value to the platform or differentiate through customization is certainly a very strong incentive.”