Blog Post

NY Hedge Fund Buys Almost 10% of Palm

Stay on Top of Enterprise Technology Trends

Get updates impacting your industry from our GigaOm Research Community
Join the Community!

Palm (s PALM) might be on a slippery slope to nowhere with its future looking bleak, but one New York-based investor, Harbinger Capital Partners, is clearly betting on a good outcome. They have invested an undisclosed amount of money, buying up 16 million shares, or roughly 9.48 percent of the company.

Harbinger, which is headed by investor Phil Falcone, also owns stakes in The New York Times and some satellite companies that plan to develop a wholesale broadband network in the U.S. Given that these guys bet on crazy assets for a living, I am sure they have a good reason for making this trade. I may be in the minority for feeling that whoever buys Palm is going to end up just like Palm sooner or later.

8 Responses to “NY Hedge Fund Buys Almost 10% of Palm”

  1. Om, backreading on some of your posts. I think you are right on the money here. People are fixated on what is working with Palm and how much money it cost to built it and concluding that it must therefore have non-zero value. I was shocked to read barron’s over the weekend.

    I favor your viewpoint, those metrics are irrelevant and history is full of superior technology that got lost in the throws of competition. The bigger question is who is willing to invest the necessary marketing capital to make this OS remotely competitive. No handset OM is dumb enough to think that they can maintain this as a side show and therefore they have to be big enough to have the capital to deploy into it, yet unsuccessful enough in their own ventures to be willing to change gears into this pile of crap… I don’t buy it. Palm is 3Com (overlap in founders) all over again. Both also rans with vastly commoditized ip and subscale infrastructre. Maybe Haewei buys them, but I highly doubt it.

    I would be shocked if Nok, HTC or Rim choppered into this mess. I think way too highly of those mgmt teams.

    Either way, if they do buy it…it will never work. management will flee as soon as economically viable and this thing will “Myspace” into nothing.

    keep up the good work. love the site.

  2. Paul Calento

    As we move to a “cloud computing”/services-based world, Palm’s WebOS, makes it easy to develop apps easily. While this hasn’t translated into a vibrant ecosystem (yet), it could with the right partner/buyer that has access to attractive telecom/service provider deals. About Me (

  3. Om,
    Is it a coincidence or you have insider knowledge. Two days back you posted pal road to nowhere, now wee see someone put money in palm. The question is why would a hedge fund put money on a company that everyone thinks is dead. Its either they are gambling or there is a genuine chance of profitability that others are not seeing. Either way it is interesting to follow palm. We will see how long it takes for the company to bounce back or go bankrupt.

  4. So let me first say that I am not a fan of the Palm Pre. I picked up a Pre+ from Verizon for a long weekend and wound up returning it in favor of my old Blackberry. But the small amount of time I spent with it convinced me that Palm DOES have something to offer a suitor. To be fair, Palm has issues and has not delivered on several fronts and they have admitted to as much. But the WebOS is not without merit and has a good developer following. It is surprisingly mature for such a new OS. It just needs a little more time to incubate and better hardware. Really that is the biggest problem at present. The Pre & Pixi are not robust enough. The screen is too small, notifications go unnoticed, the processor is slow but overall… the usability is very good. Throw in a new handset the likes of the HTC G4 with the WebOS and you have a real contender. If Palm is free to work on maturing the WebOS, the developers are encouraged to bring more of the ‘homebrew’ apps to the store and the ‘OS patches’ available via Preware are integrated into the OS, you will have a winner. A lot of people know this, but surprisingly they are not admitting it. Come on HTC, throw your hardware experience behind Palm and let them focus on the WebOS. You, Palm, Harbinger and Elevation will all come out smelling like roses and will have a nice little piece of the US smart phone market!

  5. wondering

    this is insane. palm founders and current staff are not as innovative as they think they are. furthermore, palm got herbed up on all their products by the likes of apple and samsung. shame, shame shame on palm. unless there is a white knight willing to put palm out of its misery via merger (making this an insider trade) i say its a dumb idea. palm should simply get rid of its remaining assets or come up with something nuts, like their own cellphone service provider. anyone know if the new owners could simply gain 2 points and dump palm?