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Palm signs on former Apple heads in private equity deal

post #1 of 12
Thread Starter 
In an attempt to reverse the course of its ailing smart phone business, Palm has taken a cash infusion from a private equity group and hired two of Apple's better-known former executives.

On Wednesday, shareholders from the Sunnyvale, Calif.-based company agreed to a deal with investment group Elevation Partners that would provide a direct $325 million boost as well as an extra $400 million through debt financing and an opportunity to restructure its equity plans. The approval completes a transaction first proposed in June.

In return, Elevation Partners would gain an approximately 25 percent stake in the company. Shareholders would also receive $9 per share in exchange for the reduced value of their holdings.

The move was characterized as a revitalization effort by Palm, whose entire Treo smart phone line fell behind Apple in sales during July despite Palm's veteran status in the market. The company recently suffered embarrassment after canceling its notebook-like Foleo phone companion before an actual launch and has often been accused of allowing the Treo to languish despite competition from the BlackBerry and other, sometimes more advanced products.

"We appreciate our stockholders' strong support of these proposals and look forward to an era of renewed innovation and focused execution at Palm," claimed company president Ed Colligan.

Potentially more relevant in the transaction, however, is the addition of two recently departed Apple executives to the phone maker's Board of Directors in connection with the deal. Although Palm would not explain the reasoning behind either decision, it agreed to appoint Apple's former senior engineering VP, Jon Rubinstein, as executive chairman and previous chief financial officer, Fred Anderson, as a general board member.

Rubinstein is widely believed to have been recruited in an attempt to translate his success with the iPod to Palm. Before leaving Apple in October 2005, Rubinstein was best known for heading and completing development of the original iPod jukebox in just eight months -- a feat which ultimately led to Apple's second resurgence and its near-total dominance of music players in the US. The executive was also one of the first senior staffers to be hired after the return of Steve Jobs in 1997 and led the engineering efforts behind the first iMac.

Fred Anderson's role is less certain, but may unintentionally cloud Palm's efforts to restore confidence in its name. The executive helped form Elevation Partners in March 2005 but managed Apple's finances from 1996 until his retirement from the electronics giant in 2004, when he joined the latter's own Board of Directors. It was during his original tenure that he reportedly backdated stock options improperly for Apple chief Steve Jobs. Anderson denied any culpability but agreed to a financial settlement with the Securities and Exchange Commission to avoid further legal trouble. Apple formally distanced itself from Anderson in the process.
post #2 of 12
With the new Apple heads on board, can I turn in my Treo 680 for an iPhone?

I'll send it out as soon as its tenure as doorstop is over.
post #3 of 12
Apple will put more pressure on prices and inventories of all types of solid state memory, so whatever Palm is going to do, I'd say they need to do it now.
From what I see, thier OS strategy is a little fragmented at times, but their flexibility might allow them to use thier prowess to capture the imaginations of a slightly different market segment than Apple is targeting (like lower-end consumers or business) at a time when a traditional cell phone just isn't "cool" enough for consumers anymore, but those comsumers can't quite "reach for the Apple," so to speak.
I don't know if they should try to out-do Apple, but they could.
I wondor what Motorola is planning.
post #4 of 12
Wow, desperate moves by Palm. Simply hiring 2 people away from Apple will not enable them to change the "guts" of their organization. Steve is the real core of Apple (if you'll forgive the pun).

Proud AAPL stock owner.

 

GOA

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Proud AAPL stock owner.

 

GOA

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post #5 of 12
Quote:
Originally Posted by SpamSandwich View Post

Wow, desperate moves by Palm. Simply hiring 2 people away from Apple will not enable them to change the "guts" of their organization. Steve is the real core of Apple (if you'll forgive the pun).

Palm did not hire these 2 people away from Apple.

I would be nice if you would edit or correct your mistake.
post #6 of 12
Tevanian quit the same day Rubinstein quit - the day before Apple's 30 year anniversary. Talk about sending a message.
post #7 of 12
Palm Desktop update NOW!!!! It is buggy, ultra-limited and not being updated for ages!!!
post #8 of 12
I wonder if they can they spill their guts for money even if they signed non disclosers? But I agree, what on earth can they do at Palm, with these guys or not, to even see Apple's heels in the dust?
Enjoying the new Mac Pro ... it's smokin'
Been using Apple since Apple ][ - Long on AAPL so biased
nMac Pro 6 Core, MacBookPro i7, MacBookPro i5, iPhones 5 and 5s, iPad Air, 2013 Mac mini.
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Enjoying the new Mac Pro ... it's smokin'
Been using Apple since Apple ][ - Long on AAPL so biased
nMac Pro 6 Core, MacBookPro i7, MacBookPro i5, iPhones 5 and 5s, iPad Air, 2013 Mac mini.
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post #9 of 12
Any takers on how long Rubenstein and Anderson will stick around? How much badgering are they going to get from the top Palm guys?

For that matter, any takers on when Palm somehow folds to Microsoft as Sun just did?
post #10 of 12
Anyone find it interesting that Elevation Partners' main investment partner is Bono?

U2 has been a big part of Apple marketing over the last 3 or 4 years with the U2 iPod, Exclusive iTunes marketing, Bono being featured repeatedly in iPod and iTunes ads, Product RED... etc.

It's odd then that they would decide to throw their money behind a competing product line.

Bono's Bio
post #11 of 12
Quote:
Originally Posted by Abster2core View Post

Palm did not hire these 2 people away from Apple.

I would be nice if you would edit or correct your mistake.

Nope. Not gonna do it.

Proud AAPL stock owner.

 

GOA

Reply

Proud AAPL stock owner.

 

GOA

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post #12 of 12
Quote:
Originally Posted by a_calder View Post

Anyone find it interesting that Elevation Partners' main investment partner is Bono?

U2 has been a big part of Apple marketing over the last 3 or 4 years with the U2 iPod, Exclusive iTunes marketing, Bono being featured repeatedly in iPod and iTunes ads, Product RED... etc.

It's odd then that they would decide to throw their money behind a competing product line.

Bono's Bio

Not completely odd... some of us own MSFT and AAPL stock. Guess which one is doing better these days.

Proud AAPL stock owner.

 

GOA

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Proud AAPL stock owner.

 

GOA

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