Palm Loses Retail Partner and Key Executive
It seems that the writing may be on the wall for up-for-sale Palm after it apparently lost the support of retail partner RadioShack, as well as a key webOS executive
Palm is reportedly losing a key retail partner after the Dow Jones Newswires reported 19 April that RadioShack stores are letting supplies of Palm Pre and Pixi smartphones run out, with no plans for replenishment.
RadioShack has sold the devices through an agreement with Sprint Nextel – Palm’s carrier partner in June 2009, when it launched the Pre and made a bid to reinstate its leadership position in the mobile device world. A spokesperson for Sprint Nextel, however, confirmed to Dow Jones that RadioShack will phase out the products to make room for two new phones from Sprint, though he declined to offer additional details.
The news comes as Palm executives have hired Goldman Sachs and Qatalyst Partners to help find a company interested in acquiring the ailing smartphone maker. Analysts have lobbed around the names of potential prospects, from Research in Motion to Motorola, Nokia and Huawei, for reasons ranging from Palm’s US market presence to its patent portfolio. It’s strongest asset, however, is generally agreed to be its webOS platform – and, presumably, its webOS development team. Which made it particularly bad news for Palm to have its senior vice president of software and services, Mike Abbott, resign.
PreCentral reported 16 April that according to an SEC filing, Abbott’s last day will be 23 April.
In the filing, Palm details that it has begun implementing a retention program – including quarter-million-dollar cash bonuses – to help keep other key employees in their seats.
“The program includes equity awards and cash bonuses to be earned over a two-year period, provided that the individuals remain as employees of the Company,” the document states. It goes on to name the Palm employees who are part of the program and explains, “Each received a grant of restricted stock units pursuant to Palm’s 2009 Stock Plan and a cash bonus of $250,000 (£164,000).”
Palm shares rose by as much as 20 percent on 14 April, following news that Philip Falcone’s Harbinger Capital owned a nearly 10 percent stake in Palm. However, following news of Abbott’s departure, and RadioShack’s stepping away, stocks fell again.
In the early part of 20 April, Palm shares were trading at approximately $4.69 (£3.07), which was down 4.67 percent.
