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Born in Italy, Giovanni Alonge attended the Italian Naval Academy and graduated with a Bachelors of Science degree in electrical engineering. After the mandatory military service, Giovanni came to the United States in 1997 where he began his career as financial advisor for a regional brokerage... More
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  • Palm's wild ride
    After all the speculation about who will purchase Palm, after analysts throughout the industry valued the stock from anywhere between zero to ten dollars per share, Palm found its savior in Hewlett Packard.
    In a press release on Wednesday, HP said that they would acquire the struggling phone manufacturer for 1.2 billion dollars, which includes assuming Palm’s debt.  As an increasing number of computer manufacturers are looking to enter the smart phone market, the purchase of Palm provides HP an established brand who carriers its own signature operating system.  In its press release, HP added that they are excited about the acquisition and plan to use Palm’s WEBos to bolster its future offerings in the market.
     “Palm’s innovative operating system provides an ideal platform to expand HP’s mobility strategy and create a unique HP experience spanning multiple mobile connected devices,” Todd Bradley, executive vice president of HP’s personal systems group, said in a statement. “The Smartphone market is large, profitable and rapidly growing, and companies that can provide an integrated device and experience command a higher share. Advances in mobility are offering significant opportunities, and HP intends to be a leader in this market.”
    For HP, Palm will be considered a valuable addition to their team.  Hewlett Packard, who is the number one computer manufacturer in the U.S., has been nearly absent in the mobile phone market at a time when their major competitors, such as, Dell and Asus have already made plans to enter the industry.
    For Palm shareholders, Wednesday’s announcement marked the end of the turbulent ride that has been Palm.  In the last year, Palm’s value has ranged from 18.09 per share to 3.65 per share.  In recent months, analysts covering the stock gave Palm a wide range of values from 0.00 to 14.00 per share.
    HP said Palm's current chairman and CEO, former Apple Inc. executive Jon Rubinstein, is expected to remain with the company.  In after-hours trading, Palm was up 27.4%, or $1.27 to $5.90 while HP shares were down 38 cents, or -0.7%, to $52.90.

    Disclosure: No Position
    Tags: PALM, HPQ
    Apr 28 8:52 PM | Link | Comment!
  • Will lenovo save the day for palm
    Lenovo, the fourth largest PC maker in the world, became the leading candidate to buy U.S.-based Palm after HTC, the world's fifth ranked smart phone brand, decided to not pursue the takeover after reviewing Palm’s books. 
    Lenovo, who made headlines in 2005 with the purchase of IMB’s PC business, does have a smart phone in their product line that is presently offered in China. However, the company has no presence in the U.S. market, which remains the top smart phone market in the world in regards to the number of users.
    Skeptics of a Lenovo takeover contend that using Palm as a gateway into the U.S. would mean that Lenovo would be faced with the daunting task of competing with industry leaders, such as, Apple and Research in Motion. In order to have any kind of success, the critics point out that Lenovo would have to dedicate additional resources into the marketing and product development within the U.S. while attempting to build market share in China.
    On the other hand, a Palm acquisition would give Lenovo an established brand within the U.S., as well as, one of the best operating systems in the industry. Additionally, Palm has already penetrated the Chinese market where it has introduced the Palm Tungsten™ T, Zire™ and m500 handhelds.
    With China being the largest smart phone market in Asia (68%), China might actually provide Palm with a plan-b in case none of the suitors actually place a bid. This may prove to be the reality for Palm as the majority stockholders still maintain the $1 billion asking price for the company.
    As a pioneer in the smart phone market, Palm helped to define the industry. Despite the early foothold in the market, the company has failed to sustain growth. While analysts are hesitant to write off the company, they agree its future is in doubt.

    Disclosure: No Position
    Tags: PALM, LNVGY
    Apr 27 6:07 PM | Link | Comment!
  • Palm stumps analysts
    In recent weeks, Palm, which helped pioneer the market for personal digital assistants, has become the subject of merger rumors. With the purchase of Palm, suitors would receive the WEBos software that competes against mobile operating systems from Apple, as well as Google. For Palm shareholders, a sale would end the roller coaster that has been Palm. Since December, 2008 the stock surged more than 10-fold before erasing most of the gains in recent months.
    Recently, Palm hired investment banking power house Goldman Sacks and tech guru banker, Frank Quattrone, to sort out the available options for the company.
    Analyst opinions on the value of Palm have been just as erratic as the stock price. Among the most notable came from RBC analyst Mike Ambramsky who put the value of the company between 10 and 14 dollars per share, mentioning Hewlett-Packard as a most likely buyer. 
    In his research report, Ambramsky wrote, "Potential acquirers may look beyond Palm's struggling hardware business and capital structure ... and see a rare opportunity to acquire a modern Smartphone OS, unique R&D team and budding developer ecosystem."
    Many argue that the sales price of Palm will not necessarily depend on the company’s financial condition. Supporters of this theory suggest that Palm’s real value lies within the company’s intellectual property as the company possesses a rich portfolio of patents and is home to the best software engineers in the industry.
    Previous press reports have indicated that Palm’s largest capital backer, Elevation Partners, has been insistent on an acquisition price tag of at least $1 billion. The RCB Capital Markets’ estimate of $10 to $14 a share would fetch a near $1.7 billion, at the low end of the estimated price range.
    Elevation Partners, who controls around 30% of the company, has a cost basis of about $5.41 (factoring in the convertible preferred shares). Any offer to purchase Palm must appease there largest shareholder and there stern price tag of at least $1 billion.

    Disclosure: No position
    Tags: PALM
    Apr 26 1:05 PM | Link | Comment!
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