With lackluster sales of its latest smartphones, Palm, Inc. supposedly wants to be acquired by a larger company. Palm has been independent for many years, but reportedly has decided that it can’t be that way for much longer.
An unconfirmed report indicates that the company has turned to Goldman Sachs Group Inc. and Qatalyst Partners for help in buying a partner. HTC and Lenovo are allegedly interested, and Nokia is also rumored to be looking at Palm. Dell supposedly considered making an offer, but ultimately passed.
The driving force behind the move may be Elevation Partners, the private equity firm that owns 30% of Palm.
Feast then Famine
In the 1990s, Palm dominanted the PDA market, even in the face of tough competition from Microsoft. Much of its appeal slipped away as consumer interest turned from PDAs to smartphones, but Palm sold millions of Treos in the middle of the decade.
But the Palm OS, the software the company used on all its products, stagnated for many years and sales dropped off.
Last year, the company introduced the webOS, and suddenly regained some of its old spark. The new operating system garnered generally positive reviews, but the expected rush of new customers didn’t materialize. In February, Palm admitted that the webOS wasn’t catching on as fast as it had predicted.
As Palm’s fortunes have risen and fallen, so has its share pace. In the last 52 weeks, it reached a high of $18.09 and a low of $3.56. It is currently trading at about $6, up 15% on the day that reports circulated of a possible buyout.