If ever there were a technology company known for performing when its back is up against the wall, it's Palm.
In its 16-year history, the company that made handheld computing commercially viable first with its PalmPilot devices, then later with its Treo line of smartphones, has seen its identity and even its name shift several times. And often those changes have come at times when circumstances were darkest, usually turning things around for the better.
There was the time in 2003 when Palm and Handspring, a cousin company started by three original Palm founders, decided they belonged together after competing for three years. The merger resulted in the Treo, originally conceived at Handspring, which was strapped for cash. Another time, in 1999, Palm, then a unit of 3COM, was dismissed as a one-hit wonder as sales of the original PalmPilot slowed. Then came the sleek Palm V, and sales rocketed once again.
Perhaps now is one of those times as well. On Dec. 22 the company announced it had secured a $100 million capital infusion from its largest single investor, Elevation Partners. The investment comes on top of a prior investment from the firm in 2007, of $325 million for a 25 percent equity stake in Palm.
Expectations for New Operating System
Looking back, it doesn't seem to have been a very smart move. Elevation valued Palm at 17.50 a share. The latest investment values the company at 3.25 a share, and the stock closed on Dec. 23 at 3.50. [At least $9 of the drop can be attributed to a repricing of the stock in late 2007 as part of the closing of Elevation's first investment.]
The move comes at one of the moments in Palm's history when the clouds are indeed rather dark, but when there appears to be, once again, the prospect of...

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