Tuesday, June 5, 2007
Palm Sells 25% Stake To Apple and Bono
Posted by Ed Hansberry in "NEWS" @ 10:00 AM
http://www.moconews.net/entry/419-palm-to-sell-25-percent-stake-to-elevation-for-325-million/
"Palm, facing increasing competition in the industry, is selling a 25 percent stake to Elevation Partners, the private-equity firm that has Bono as a partner and a bunch of former Apple Inc. executives, reports WSJ. Elevation will invest $325 million for that stake...Palm will pay $940 million in cash to existing shareholders whose ownership of the company will drop to 75 percent, the story says. The company will fund the restructuring with the $325 million from Elevation, $400 million in new debt and more than $200 million of cash on its balance sheet to complete the transaction. Jon Rubinstein, Apple’s former head of hardware who helped pioneer iPod, will join Palm as executive chairman and head up product development."
Well, say goodbye to product stagnation. Palm hasn't done any really new products since the introduction of the Treo 650. All subsequent devices were just mild evolutionary changes to a successful product. I am ignoring the ill-fated LifeDrive, as well as the as yet unreleased Jornada 820... I mean the Palm Foleo.
Can new life be breathed into the Palm product line? Will Palm, now with significant "Apple" influence continue to use Windows Mobile? Will Bono start appearing in hip Palm commercials? Will Paris survive her 30 day stint in the big house? Wait. Scratch that last one - had a different browser window open. :wink: Palm shares closed up nearly 10% on the news.
"Palm, facing increasing competition in the industry, is selling a 25 percent stake to Elevation Partners, the private-equity firm that has Bono as a partner and a bunch of former Apple Inc. executives, reports WSJ. Elevation will invest $325 million for that stake...Palm will pay $940 million in cash to existing shareholders whose ownership of the company will drop to 75 percent, the story says. The company will fund the restructuring with the $325 million from Elevation, $400 million in new debt and more than $200 million of cash on its balance sheet to complete the transaction. Jon Rubinstein, Apple’s former head of hardware who helped pioneer iPod, will join Palm as executive chairman and head up product development."
Well, say goodbye to product stagnation. Palm hasn't done any really new products since the introduction of the Treo 650. All subsequent devices were just mild evolutionary changes to a successful product. I am ignoring the ill-fated LifeDrive, as well as the as yet unreleased Jornada 820... I mean the Palm Foleo.
Can new life be breathed into the Palm product line? Will Palm, now with significant "Apple" influence continue to use Windows Mobile? Will Bono start appearing in hip Palm commercials? Will Paris survive her 30 day stint in the big house? Wait. Scratch that last one - had a different browser window open. :wink: Palm shares closed up nearly 10% on the news.
