Palm ReCrapitalization: Foleo a Piece of DooDoo?
Trip Hawkins and various permutations of Palm have cranked out a ton of PDAs over the years, and now the company is cranking out a $9 dividend to holders of the $17 stock, all as part of a recapitalization that will give 25% of the company to Elevation Partners and put $440 million in debt on the books.
But it sounds sweet if you’re a shareholder, right? You don’t get a 50% stock dividend very often. Then again, it might not be such a sweet deal if your stock is worth ten bucks less at some point in the future.
The crux? The deal brings management expertise from Elevation and two former Apple execs in the form of Jon Rubinstein and Fred Anderson. This type of savvy could be . . . priceless.
But note the new Foleo product Palm is pushing. It’s basically a $500 256K Atari you hook up to your cell phone. It could be the thang of the future, but it sure looks like a POS.
The investment gamble: Can Rubinstein, a driving force behind the iPod, make the Foleo a viable product–either an iPhone killer or an accessory for it?
Maybe. If anyone can, it’s Rubinstein. But expecting so much of him is getting into miracle territory. I mean, if Apple had handed him an accordion and told him to turn it into an MP3 player the size of a stick of gum, he probably would have told them to stick it.
Plush poop image from here.
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POSTED IN: News, corporate insanity, technology
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