PALM

[wrangler]

Press Release Source: Palm, Inc.


Palm Opens Five New Stores in California
Monday November 7, 11:16 am ET  
Original Valley Fair Location Showcases Success of Retail Store Program


SUNNYVALE, Calif.--(BUSINESS WIRE)--Nov. 7, 2005--Palm, Inc. (Nasdaq:PALM - News) today announced the opening of five Palm Retail Stores in California. The new stores include the following:
The Palm Retail Store at Valley Fair Westfield Shopping Town (San Jose), a new inline store that opens today, replacing the original kiosk location;
The Palm Retail Store at San Francisco International Airport, Terminal 1, which opened Oct. 24;
The Palm Retail Store at San Francisco International Airport, Terminal 3, which opened Nov. 5;
The Palm Retail Store at Palm's company headquarters in Sunnyvale, which opened Nov. 2; and
The Palm Retail Store at the Grove Shopping Center (Los Angeles), an entertainment and shopping destination, which opens on Nov. 14.
These stores represent close to 30 percent growth in Palm Retail Store locations, strengthening the Palm brand and reflecting the success of the retail-store strategy that Palm selectively began rolling out with the original kiosk location at Valley Fair three years ago.

"Our retail stores offer a casual shopping environment where Palm solutions experts put the Palm experience directly into the hands of new and upgrading customers, which benefits current and future sales across all our retail and carrier partners," said John Hartnett, senior vice president of Palm's worldwide sales and customer service. "Early surveys have shown that more than 31 percent of shoppers who stop at the Palm Retail Stores purchase from other retail partners, giving us confidence that the stores are a strategic as well as commercial success."

Retail Store Customers

The Palm Retail Stores embody the company's belief that the future of personal computing is mobile computing. According to IDC's Mobile Worker Forecast, nearly two-thirds of U.S. workers will travel for business in 2006. Many of the stores are located in some of the nation's busiest airports; these continue to be popular with Palm's main demographic of mobile business customers, who appreciate the ability to upgrade an existing device or purchase accessories while traveling.

Palm Retail Stores also are reaching new users who are buying Palm's high-end devices, demonstrating the rewarding experience customers have when they interact with knowledgeable staff and have a hands-on experience with Palm® products. Forty-three percent of Palm Retail Store customers are new to handheld computing -- 56 percent of those new users are buying Palm Treo(TM) smartphones, and 44 percent are buying Palm handhelds and Palm LifeDrive(TM) mobile managers.

"Our first Palm retail location, a kiosk at Valley Fair, was the beginning of a pilot program to get more consumers to experience Palm products and accessories," said Kanwal Sharma, director of Palm Retail Stores. "Today we're opening a stylish 800-square-foot store at Valley Fair, and have 22 stores nationwide. The solid growth in year-over-year revenue demonstrates the success of the retail strategy; for example, during the 12-month period ended Oct. 6, 2005 over the preceding 12-month period, revenue at the Valley Fair store grew almost 52 percent."

All Palm Retail Stores offer the following:

a hands-on experience with the current line of popular Palm products and accessories, including Palm Treo smartphones, the Palm LifeDrive mobile manager, and the new Palm TX handheld and Palm Z22 organizer;
software applications from Palm and third-party developers; and
expert support and the exceptional brand experience customers expect from Palm, demonstrating the company's vision that handheld computing solutions can help people enhance their productivity and enjoyment of life.
More information about Palm Retail Stores and locations can be found at www.palm.com/retail.

NOTE TO PRESS: Broadcast video is available from the Palm media contact and online from Palm's Multimedia Library (www.palm.com/MultimediaLibrary). Press can register at the site to browse and preview an extensive content library and order footage directly from their desktops. Registration and ordering on the site is free.

About Palm, Inc.
Palm, Inc., a leader in mobile computing, strives to put the power of computing in people's hands so they can access and share their most important information. The company's products for consumers, mobile professionals and businesses include Palm® handheld computers, Palm Treo(TM) smartphones, Palm LifeDrive(TM) mobile managers, as well as software, services and accessories.

[lancefur]

The chart looks great. 50MA just touches the 200MA and should cross today.

[setravis]

Ouch !   

• Palm downgraded by Bear Stearns
Briefing.com (Thu 8:24am) 

Palm: Recap Completed; Bear Stearns Cuts Rating; Sees "Significant Downside Risk"; Puts Fair Value at $5-$6/Shr
at Barron's Online (Thu 10:24am) 


52wk Range: 13.41 - 19.50
Volume: 2,971,203
Avg Vol (3m): 2,442,710
Market Cap: 950.94M
P/E (ttm): 24.52
EPS (ttm): 0.37

Technicals
Last Price Quote is:
-46.51%below 13-day MA
-42.92%below 50-day MA
RS Rating: 4

Fundamentals
Key Data:
Market Cap (M): $1,805.43 
P/E Ratio: 46.04 
PEG Ratio: 9.73548 
Next Earnings: 12/18/2007
Last Analyst Rating: Sell

[setravis]

Press Release Source: Palm, Inc.


Palm Closes Strategic Recapitalization with Elevation Partners
Wednesday October 24, 4:14 pm ET 
Rubinstein Named Executive Chairman,
Anderson and McNamee Join Board


SUNNYVALE, Calif.--(BUSINESS WIRE)--Palm, Inc. (Nasdaq:PALM - News) today announced that its recapitalization plan with the private-equity firm Elevation Partners ("Elevation") has closed, positioning Palm to lead the next phase of the smartphone and mobile-computing markets. Elevation has invested $325 million in Palm, and the company will utilize these proceeds along with existing cash and $400 million of new debt to finance a $9 per share cash distribution. Palm shareholders of record as of Oct. 24, 4 p.m. EDT, should receive the cash distribution within approximately 10 business days.


Jon Rubinstein, former senior vice president of hardware engineering and head of the iPod division at Apple, has joined Palm as executive chairman of the board, and Fred Anderson and Roger McNamee, managing directors and co-founders of Elevation, have joined Palm's board of directors. Rubinstein, Anderson, and McNamee replace Eric Benhamou and Bruce Dunlevie, who resigned from Palm's board of directors. The total number of directors on the board has been increased from eight to nine in connection with the transaction.

"This transaction lays the groundwork for Palm to recapture our position as the leading innovator and brand of the mobile-computing revolution. We will build on our history of innovation to create next-generation, software-rich mobile solutions that enable people to more effectively manage their lives and communicate with family, friends and colleagues wherever they are," said Ed Colligan, Palm president and chief executive officer. "We are also pleased that we can reward our shareholders with this $9 cash distribution, and provide them with the opportunity to be rewarded further through their continued long-term investment in Palm."

Jon Rubinstein said, "I am focused on working with Ed and the team to build on the legacy of Palm and drive innovation in the mobile-computing market. Over the last few months, I've seen the huge potential that lies in Palm's brand, distribution and loyal customer base. Palm's future roadmap in terms of both the software and products is impressive and complements the new products that Palm has recently introduced. While there is much work to be done, there are exciting days ahead for all of us."

Roger McNamee added, "The next generation of mobile computing will be defined by companies that have deep software expertise as well as leading design capabilities. We are confident that Palm can and will drive the future of mobile computing with its integrated software solutions, history of innovation and loyal customer base. We look forward to working with Ed, Jon and the entire Palm team to deliver cutting-edge products that will transform the mobile-device market and create long-term value for Palm's shareholders."

As a result of the closing of this transaction with Elevation, Palm is providing additional Q2 fiscal year 2008 guidance for the following data:


-- Total other income (expense), net, is expected to be in the range
   of $1.0 million to $1.5 million, which consists of:
    -- Interest expense, which is expected to be in the range of
       $3.8 million to $4.3 million;
    -- Interest income, which is expected to be in the range of
       $5.8 million to $6.3 million; and
    -- Other income (expense), net, which is expected to be in the
       range of $(0.5) million to $(0. million;
-- Accretion of Series B Convertible Preferred Stock issuance costs to
   accumulated deficit is expected to be in the range of $0.1 million
   to $0.2 million; and
-- Shares used to compute basic and diluted per common share
   calculations on a net loss basis are expected to be approximately
   104.9 million shares. Shares used to compute basic and diluted per
   common share calculations on a net income basis are expected to be
   approximately 120.5 million shares and approximately 123.1 million
   shares, respectively.
If the transaction with Elevation had closed at the beginning of Q2 fiscal year 2008, the expected impact for the full quarter would have been:


-- Total other income (expense), net, estimated in the range of $(5.5)
   million to $(6.0) million, which consists of:
    -- Interest expense, estimated in the range of $9.5 million to
       $10.0 million;
    -- Interest income, estimated in the range of $4.5 million to
       $5.0 million; and
    -- Other income (expense), net, estimated in the range of $(0.5)
       million to $ (1.0) million;
-- Accretion of Series B Convertible Preferred Stock issuance costs to
   accumulated deficit is expected to be in the range of $0.2 million
   to $0.4 million; and
-- Shares used to compute basic and diluted per common share
   calculations on a net loss basis are expected to be approximately
   104.9 million shares. Shares used to compute basic and diluted per
   common share calculations on a net income basis are expected to be
   approximately 143.1 million shares and approximately 145.7 million
   shares, respectively.
The above update to Q2 fiscal year 2008 guidance does not contemplate the accounting impact of a beneficial conversion feature of the Series B Convertible Preferred Stock as a result of the stock price on Oct. 24, 2007 closing above $17.50 per share.

Under the terms of the recapitalization plan, Elevation has purchased $325 million of a new series of convertible preferred stock. The conversion price is $8.50 per share. Elevation will own approximately 27 percent of Palm's outstanding common stock on an as-converted basis, based on the number of shares of common stock outstanding as of August 31, 2007.

The company secured commitments for $400 million of new debt and a $30 million revolving credit facility, which will not be drawn at closing. JPMorgan and Morgan Stanley were joint bookrunners for these facilities.

Palm intends to use the proceeds from the sale of the preferred stock, existing cash and the proceeds from the $400 million of new debt to fund the cash distribution. The amount of total proceeds to be distributed to shareholders is estimated to be approximately $950 million. The distribution is expected to be treated as a return of capital for most shareholders.(1) Elevation will not be eligible to participate in the cash distribution.

Palm's payment agent expects to transfer funds to the Depository Trust Company and mail checks to registered shareholders on Oct. 31, 2007, and brokers and shareholders should receive the cash distribution shortly thereafter.

In connection with Mr. Rubinstein's appointment as executive chairman of the board, the company will issue to him options to purchase an aggregate of two million shares of Palm's common stock and an award of one million restricted stock units ("RSUs"). The stock options will be granted at fair market value on the date of grant, and half of the shares underlying the options will vest on a time-based formula. The RSUs will have a purchase price of $0.001 per share, which will be deemed paid through the provision of services, and half of the shares underlying the RSUs will vest on a time-based formula. The remaining stock options and RSUs will vest upon the later of the achievement of certain performance targets for the company or a time-based formula. Pursuant to Nasdaq Marketplace Rule 4350(i)(1)(A)(iv), the company will grant the stock options and RSUs to Mr. Rubinstein as a new employee of Palm.

Morgan Stanley served as financial advisor to Palm; Houlihan Lokey Howard & Zukin Advisory Services, Inc. provided a fairness opinion to Palm; and JPMorgan acted as financial advisor to Elevation. Wilson Sonsini Goodrich & Rosati, Professional Corporation, served as outside counsel to Palm; and Simpson Thacher & Bartlett LLP acted as legal advisor to Elevation.

About Elevation Partners

Elevation Partners is a $1.9 billion private equity firm that makes large-scale investments in market-leading media, entertainment, and consumer-related businesses where it can partner with management to enhance growth and profitability through a combination of strategic capital and operational insight. Its investment team has a unique combination of media, entertainment, and technology knowledge and relationships; investing experience; and operating expertise. Elevation's five partners are Fred Anderson, former EVP and CFO of Apple; Bret Pearlman, former senior managing director of The Blackstone Group; Marc Bodnick, a founding principal of Silver Lake Partners; Roger McNamee, co-founder of Silver Lake Partners and Integral Capital Partners; and Bono, lead singer and co-founder of the rock band U2. For more information, visit http://www.elevation.com.

About Palm, Inc.

Palm, Inc., a leader in mobile computing, strives to put the power of computing in people's hands so they can access and share their most important information from anywhere. The company's products for consumers, mobile professionals and businesses include Palm® Treo™ smartphones and Palm handheld computers, as well as software, services and accessories.

Palm products are sold through select Internet, retail, reseller and wireless operator channels throughout the world, and at Palm Retail Stores and Palm online stores (http://www.palm.com/store).

More information about Palm, Inc. is available at http://www.palm.com.

(1) The ultimate U.S. federal income tax treatment of the distribution will depend upon the results of operations of Palm through the end of Palm's taxable year. To the extent the distribution exceeds Palm's current and accumulated earnings and profits (as calculated for U.S. federal income tax purposes) for Palm's taxable year, the distribution will be treated as a return of capital (causing a reduction in a shareholder's basis in Palm stock) and capital gain thereafter for U.S. federal income tax purposes. If no amount constitutes a dividend for U.S. federal income tax purposes, any shareholder with a tax basis in his or her stock that is less than the amount of the distribution will generally be taxable on such excess as either long-term or short-term capital gain, depending on such shareholder's holding period in the stock. Shareholders should seek advice based on their particular circumstances from an independent tax advisor.

Forward-Looking Statements

This press release includes forward-looking statements that are based on certain assumptions and reflect our current expectations. Such forward-looking statements involve known and unknown risks, uncertainties and other important factors that could cause the actual results, performance or achievements to differ materially from any future results, performance, or achievements discussed or implied by such forward-looking statements. These forward-looking statements include, without limitation, statements regarding Palm's positioning to lead the next phase of the smart phone and mobile computing markets, the timing of the cash distribution to shareholders, that Palm will drive the future of mobile computing, that Palm's products will transform the mobile device market and create long-term value for its shareholders, expectations for the second fiscal quarter of 2008, including, total other income (expense), net, accretion of issuance costs to accumulated deficit, shares used to compute basic and diluted net income or loss per share, the total amount of the distribution and the tax consequences of the distribution. The risks associated with such forward-looking statements include the risks disclosed in Palm's reports filed with the Securities and Exchange Commission (the "SEC") under the caption Risk Factors and elsewhere, including Palm's quarterly report on Form 10-Q for the quarter ended August 31, 2007 and Palm's definitive proxy statement filed with the SEC on August 10, 2007. Any forward-looking statement is qualified by reference to these risks, uncertainties and factors. Forward-looking statements speak only as of the date of the document in which they are made. These risks, uncertainties and factors are not exclusive, and Palm undertakes no obligation to publicly update or revise any forward-looking statements to reflect events or circumstances that may arise after the date of this press release, except as required by law.

Palm and Treo are among the trademarks or registered trademarks owned by or licensed to Palm, Inc. All other brand and product names are or may be trademarks of, and are used to identify products or services of, their respective owners.



Contact:
Palm, Inc.
Christine Nakamoto, 408-617-7626 (investor relations)
[email protected]
or
Financial Dynamics for Palm, Inc.
Ellen Barry, 212-850-5636
[email protected]
or
for Elevation:
Sard Verbinnen & Co.
Paul Kranhold, 415-618-8750
[email protected]
Ron Low, 415-618-8750
[email protected]

--------------------------------------------------------------------------------
Source: Palm, Inc.

[setravis]

Why they're doing this, I don't know. 
I see that they're going to Under promise, Over Deliver next Quarter.
Centro due out soon, might give non-phone PDA's a boost. Only $99.00, so should sell a lot to the youth mkt.
The Centro has the potential to be a big hit this Christmas, Especially with the younger Consumers.






AP
Palm Closes Investment by Elevation
Wednesday October 24, 6:13 pm ET 
Palm Closes Investment by Elevation Partners, Set to Pay Shareholders $9 Per Share


SAN JOSE, Calif. (AP) -- Palm Inc. said Wednesday it has closed the deal to sell a 27 percent stake of itself to private equity firm Elevation Partners and pay a special distribution of $9 per share to shareholders.


Elevation has invested $325 million in Palm, which will use the money, along with cash on hand and $400 million in new debt, to pay shareholders about $950 million. Sunnyvale-based Palm said shareholders of record as of Wednesday's market close should receive their payments within about two weeks.

The deal, first announced in June, was designed to bring in new leadership to strengthen the market position of the maker of Treo smart phones and handheld digital assistants, which is struggling against increased competition. Apple Inc.'s former senior vice president of hardware engineering, Jon Rubinstein, has now joined the board as executive chairman and will help lead Palm's engineering teams.

Elevation partners' Fred Anderson and Roger McNamee have also joined Palm's board, replacing Eric Benhamou and Bruce Dunlevie. The total number of directors on the board has been increased from eight to nine.

"This transaction lays the groundwork for Palm to recapture our position as the leading innovator and brand of the mobile-computing revolution," said Ed Colligan, Palm president and chief executive officer.

Palm shares rose 17 cents, or 0.9 percent, to close Wednesday at $19.19.

(This version CORRECTS Edits top two grafs to correct stake in company from 25 percent to 27 percent, and total payout to shareholders to $950 million sted $940 million.)

[nicknite20]

Any1 view this as a nice turnaround play?

In @ 5.85. Betting on:

1. Short squeeze
2. Management shake up
3. Job Rubenstein adding some AAPL magic to the product line
4. Way undervalued..the market cap is 600m for crying out loud
5. Problems are temporary (component supply issues)

Thoughts appreciated.

[David Randolph]

I spent all evening rebuilding my Metastock database and don't have much time after this. But I'll write a few comments on PALM when I can.

I see that my chart has a problem, what happened in "point 1"? Stock split? Spin off?

Thanks and good luck Nick

[nicknite20]

David,
The drop was due to a $9 special dividend they paid end Oct when they struck the deal with Elevation Partners.

http://biz.yahoo.com/ap/071024/palm_elevation.html?.v=2

Also, here's a nice article on Rubenstein..

http://online.wsj.com/article/SB119750940823225431.html?mod=yahoo_hs&ru=yahoo

And another on the short positions..

http://bigtech.blogs.fortune.cnn.com/2007/11/28/palm-the-tech-stock-they-love-to-hate/?source=yahoo_quote


Another positive is the depth of management / tech expertise of Elevation. They have too much of their money at stake to let this go down.

http://www.elevation.com/images/Elevation_Partners_Intro.pdf

Look forward to your thoughts.
Nick

[nicknite20]

Nice article..

http://www.clarionledger.com/apps/pbcs.dll/article?AID=/20071221/COL0101/712210356/1300/biz

[David Randolph]

Hi nicknite

I read all your links and understand why you consider PALM to be a strong turnaround candidate.

I would say that it would be much easier for me to get interested in PALM (a $795 M market cap using 123.1 million shares outstanding on a fully diluted basis) than in RIMM ($66 B market cap) or APPL ($170 B market cap).

RIMM is worth 83 times more than PALM and AAPL is worth 214 times more.

Anyway, of course this isn't enough to consider PALM attractive. The first time you mentioned PALM I thought "here's a dying company, making a product that won't exist for much longer (PDA), pretty much like pagers died when mobile phones became mainstream".

But I've learned that PALM now also makes smart phones. Here are some examples: http://euro.palm.com/europe/en/products/treo750v/

These products seem a few steps behind competitors. PALM should talk to IMMR and buy them a license for using the VibeTonz technology and get rid of that keyboard.

I've learned that PALM was just about to launch a laptop computer, but it canceled everything on the eve of the launch date, which is odd. I think a product like a laptop computer, if it had an awesome design, could really turn things around for PALM. PALM is such a well known trademark in the World. I wonder if there's publicly available information on why was this product canceled and if it will still be launched in the near future. What do you know about this nicknite20?

Thanks

For my next update I'll listen to PALM's latest conference call looking for clues about the future. In the meantime the information you provided is encouraging and you're already 11% ahead on your investment.

We'll keep in touch on PALM (and others), good luck

[nicknite20]

David,
Thanks for the feedback.
Palm scrapped the "Foleo" companion laptop for a variety of reasons. The ones cited were that they decided to "improve" it and release it on the new OSII platform.

I feel the product was not upto the mark, and it would have cost them more on recalls & warranties than not releasing at all. There was a mention in the last cc that they wanted to reduce expenses relating to recalled products.


http://blog.palm.com/palm/2007/09/a-message-to-pa.html

Here are some pics of the product that was to be:

http://www.geardiary.com/2007/10/03/the-device-that-never-was-palm-foleo/


I strongly feel though that we have not seen the last of this..and we will see a laptop released in 2008. Also, Palm OSII is the next big thing..scheduled for end 08 / beg 09

Theres a very strong PALM community out there, and although Im not a user yet (i use a blackberry)..i would not hesitate to switch if they come out with a decent product that supports windows..

There r some rumours

http://www.foleofanatics.com/2007/10/rumor-treo-800w-reference-image.html


Finally a nice article to summarize PALM in 2008.

http://www.foleofanatics.com/2007/10/moving-forward-from-here-to-palm-os-ii.html

My personal take..i think PALM has a lot going for it. They have a very nice private equity partner who wants them to succeed..and they have the capacity to role out some good products. All it takes is 1 product to hit RIMM where it hurts

Look forward to your comments.
Nick

PS - Maybe RIMM would buy them over to kill the competition it wont cost them much.

[nicknite20]

Here's a list that i hope PALM wont make next year
but gives a bit more info on the foleo..

http://www.popularmechanics.com/technology/reviews/4236755.html?page=10

The next article analyses the product a bit more..

"The shame in all this is that the Foleo is actually a pretty cool device, and one that does have a place in the market. Traditionally, ultralight laptops have occupied the top tier of the computer price range (Sony's new TZ-Series starts at $2,200). But Foleo delivers most of a laptop's functionality (document creation, Web surfing, Wi-Fi, and e-mail), while costing less than most cheapo laptops. But the Foleo's greatest trick was its "instant on" startup and ultralong battery life. By foregoing a hard drive in favor of flash memory and using a stripped-down Linux OS, the Foleo can literally boot up as soon as you push the on button, making off-the-cuff e-mails and gotta-know-now Internet searches easy. Sure, there are handheld devices with this sort of functionality—Palm makes a few of them. But none of them split the difference between the comfort of a laptop keyboard and portability the way the Foleo does."

http://www.popularmechanics.com/blogs/technology_news/4221353.html

[nicknite20]

Nice review on PALM Q4 earnings..

http://www.everythingtreo.com/news/palm/palm-reports-financial-results-20071220564/

[nicknite20]

v nice article from forbes..

http://www.forbes.com/global/2008/0107/093.html?partner=yahoomag

[nicknite20]

This is encouraging..finally the analyst community takes notice
Lets hope this is just the beginning..to 10 and beyond !!!!

PALM is still an attractive take-over candidate in my view..most likely by GRMN or RIMM.
Good luck all.
Nick


Palm Stock Rises on Upgrade, JP Morgan Analyst Says Smart Phone Sales Will Double by 2011


NEW YORK (AP) -- Shares of Palm Inc. climbed Monday morning after a JPMorgan analyst upgraded the stock, saying sales of Palm's Centro smart phone may be better than expected.
Paul Coster raised his rating on the stock to "Overweight," or "Buy," from "Underweight," or "Sell." Coster said sales of smart phones will more than double by 2011, and if Palm launches successful products over the next six to 12 months, its growth could be very strong.


The stock gained 71 cents, or 12 percent, to $6.73 in morning trading. The stock has traded between $4.25 and $10.34 in the last year, setting an annual low on Jan. 23.

The Centro allows users to make phone calls, send text messages, instant messages and e-mails, browse the Web and take pictures.

Among the company's new products, Coster said, will be a version of the Centro with phone service from AT&T Inc. and Verizon Communications Inc. An exclusive deal with Sprint Nextel Corp. will expire soon, he wrote.

"In doing this 180-degree turn on the stock, we are putting a lot of faith in the technology and design competence of the new talent introduced to Palm by Elevation Partners," he said.

Elevation Partners, a private equity firm, bought a 25 percent stake in Palm last year.