Palm gets cash injection and Apple expertise
Palm shareholders have approved a financial restructuring that involves a $325 million private equity investment and $400 million in extra borrowing.
In return, stockholders get $9 per share and – they will hope – a more secure future for the PDA and Treo smartphone maker whose share price has fallen from more than $1,500 at the beginning of the decade to less than $15 now.
Ed Colligan, Palm’s president and chief executive office, is certainly optimistic. “We appreciate our stockholders’ strong support of these proposals and look forward to an era of renewed innovation and focused execution at Palm,” he says.
One big reason for his optimism is the confirmation that former Apple executive, Jon Rubinstein, is the new chairman of Palm’s board.
Rubinstein was head of Apple’s iPod division before leaving in April 2006. His role at Palm will be to recruit people capable of creating competitive new products and getting them to market quickly, now that the bar has been raised by innovative new devices such as Apple’s iPhones and powerful business-friendly products typified by the BlackBerry.
One device that did not appear to fit into that strategy was the Foleo smartphone companion, which Palm axed last week, just days before it was due to go on sale. However, the company yesterday launched a consumer-oriented version of its Treo smartphone, suggesting the company is targeting the mass market.
Rubinstein will be joined on Palm’s board by fellow former Apple exec Fred Anderson. Anderson takes much of the credit for rescuing Apple’s finances when he was appointed chief financial officer but last year he was embroiled in controversy and resigned from Apple’s board. He denies any wrongdoing.