Elevation Partners in Palm for the long haul
Investment firm Elevation Partners has invested some $460 million into this little company called Palm. Today, that investment has gained around 54% for the firm, and at one time had nearly tripled in value (though has since dropped considerably). So with a gain of around $250 million on the table, now would seem like a good time to take some profits, eh?
Not so, Elevation co-founder Fred Anderson said to Bloomberg, “We haven’t taken money off the table because we see a huge market opportunity here. This is a marathon.”
Given the number of changes that Elevation’s partners have instituted in Palm, from installing Jon Rubinstein as Chairman (and he guided us to the bright land of webOS) to eventually moving him in place as CEO once Ed Colligan retired. Anderson himself even serves on Palm’s board. But what future does Elevation Partners see in Palm? It’s not a takeover, as that potential does not factor into their business model (though it does factor into Palm’s stock price, and thus the value of Elevation’s investment).
What Elevation Partners sees in Palm is expansion, and we expect to see plenty of that later today at CES. At the very least, Palm will announce their partnership with Verizon, and they may even talk some about AT&T and some international carriers. Most of us here will agree that the Pre and Pixi are excellent devices, but whether or not Sprint is excellent service is another question entirely. Expanding Palm’s distribution channels, and eventually the product line, will be the key to growing Elevation Partner’s investment. And that truly is a long-term strategy.