[Posted on January 25, 2008 - 1:56 PM]
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DiggOn June 1, 2007, one business day before Palm Inc. [PALM] announced that private equity firm Elevation Partners was buying a 25% stake in the company for $325 million, shares of the mobile computing player closed at $16.09. Friday afternoon Palm's stock is limping along at $4.87, with the latest blow coming on Thursday, when the company announced that it will close all but one of its 34 retail stores.
Since Elevation's deal, Palm has lost $1.2 billion in market value. To paraphrase Elevation co-founder Bono, recently spotted in the Swiss Alps saving glaciers with Al Gore, the buyout firm still hasn't found what it's looking for in Palm.Another key element of the Elevation deal was the management overhaul at Palm, which clearly hasn't been sufficient to reverse its slide. The company brought in Jon Rubinstein, former head of Apple Inc.'s iPod division, as chairman of the board, and Elevation co-founders Fred Anderson and Roger McNamee were added as directors. Here's what McNamee had to say in a statement announcing the deal:
This is by far the largest investment that Elevation has ever made, which reflects our enthusiasm for Palm and its opportunity. This investment fits perfectly with Elevation's investment strategy of partnering with great management teams to transform businesses in industries with dynamic technology change. We see Palm as uniquely positioned to deliver the integrated software and hardware solutions that will drive the next generation of mobile computing.
And how is Palm's transformation going, by the way? "They're toast," Shareholder Value Management analyst Jeff Embersits told D/All Things Digital's John Paczkowski.
More details for you in our full story on Palm later Friday afternoon on TechConfidential.com. - Alain Sherter
See June 2007 story from TheDeal.com
See Jan. 24 story from C/net News.com
See June 4 press release from Palm
See Jan. 25 post from D/All Things Digital
See Jan. 25 post from Techdirt
Comments
From: anon4life,
Apparently not. Granted, even with the dividend, you're still talking a significant double-digit decline.
Posted on:
January 27, 2008 10:33 PM
From: Michael,
The title of this article is a good question.
I think it's fair to say however that Bono probably had very little to do with the financial decision to invest.
Posted on:
January 27, 2008 11:32 PM
did you include $9 dividend PALM paid post Elevations buy-in?