Palm Inc. sells big stake in shakeup
Smartphone maker Palm Inc. will sell a 25 percent stake to private equity firm Elevation Partners for $325 million and name the former technical guru behind the iPod to be chairman, the company said Monday.
The deal with the long-term investor brings significant new leadership to Palm, which has been battling stiffening competition in a market that is only going to get tougher with Apple Inc.’s June 29 debut of the iPhone. As part of the deal, Palm will pay a special distribution of $9 per share, or about $940 million in cash, to shareholders.
Palm, best known for the Treo line of phones, said two board members – former CEO Eric Benhamou and D. Scott Mercer – will resign. Elevation partners Fred Anderson and Roger McNamee will join Palm’s board, and Apple Inc.’s former top hardware engineer, Jon Rubenstein, will join the board as executive chairman.
•Hyundai Motor Co. leads in five categories in the annual vehicle quality study released Monday by Strategic Vision Inc., a San Diego-based market research company and consultant to automakers.
Hyundai’s rise in the rankings is only the latest sign of the improved overall quality and declining number of defects in today’s cars and trucks, said David Cole, chairman of the Center for Automotive Research in Ann Arbor.
Once known best as the maker of cheap, entry-level cars with nagging manufacturing flaws, the South Korean automaker outperformed its rivals in this year’s survey, based on interviews with 27,780 people who bought 2007 models in September-November 2006.
Last year, Hyundai had no winners. And highly regarded Toyota Motor Corp., despite improving its overall quality, went from four leaders last year to one in 2007.
•Krispy Kreme Doughnuts Inc. said Monday its fiscal first-quarter loss widened as the doughnut maker continued its recovery from a bad stumble several years ago. In the quarter ended April 29, the doughnut maker said its net loss was $7.4 million, or 12 cents per share, compared with a net loss of $6 million, or 10 cents per share, in the year-earlier quarter.
Krispy Kreme placed its famed doughnuts on grocery store shelves and expanded rapidly three years ago, just as the low-carbohydrate diet craze set in. While sales slipped, Krispy Kreme executives were forced to sort out an accounting mess. A stock that once traded at more than $50 bottomed out at about $4 in late 2005.
Krispy Kreme has since worked to bring its financial statements up to date with the U.S. Securities and Exchange Commission, filing its last overdue statement in January. Krispy Kreme shares fell 51 cents to $8.16 in trading Monday.