Harbinger Capital Partners has purchased 16 million shares of Palm, Inc., about 9.5% in total. This wasn’t the result of a new offering from Palm, rather the hedge fund bought up already available shares.
According to Harbinger’s website, it’s “a private investment firm specializing in event/distressed strategies.” Palm is a company in some distress, as sales of its webOS-based smartphones have fallen short of projections. According to one report, the situation has become bad enough that Palm is looking to be acquired by an outside company.
Harbinger Capital Partners filed a Schedule 13G form with the U.S. Securities and Exchange Commission announcing the purchase, which indicates that it does not plan on taking an active role in managing the company.
What Does It Mean?
The purchase of a significant number of Palm shares at the publicly-traded price indicates that the hedge fund believes that the shares are going to increase in value.
This is likely a result of the recent unconfirmed report that Palm is going to be acquired. As a nearly 10% stakeholder in the company, Harbinger Capital Partners could have a significant say in which company buys Palm and at what price.