HP Palm acquisition: Here comes the spurious lawsuit 57
Well, if you can't chase ambulances, you might as well chase acquisition announcements. Howard G. Smith is a lawyer in Bensalem, PA and he's apparently looking to file a case against Palm and/or HP regarding the proposed acquisition.
Smith contends that the proposed price of $5.70 per share undervalues the stock and does a disservice to stockholders, given that the stock has been as high as $13.58 within the past few months. He's even going so far as to suggest that Palm "failed to shop the Company to other potential buyers," which seems patently false given the hints dropped in Rubinstein's letter to Palm employees.
We're calling lawsuit troll on this one - but it does raise an interesting point that we haven't addressed in our flurry of posts about HP buying Palm: do you think that $5.70 per share / $1.2 billion is a fair price?
Thanks to @5xBEAR for the tip!
57 Comments
No.
Hey!! I live in Bensalem. Who is this clown? lol Maybe my neighbor.hehe
lol i live in morrisvile
Ehh, good luck with that. Considering the revised outlook Ruby made and half the analysts valuing Palm at zero despite the IP assets, it sounds like this attorney doesn't have any existing clients to take care of. And I think I understnand why.
No.
Were still right here. It's not even official til july, and second of all it will take between 1 and 2 years before they even come out with a hot new device. So for now HTC EVO 4G here we come. June 12th $199
have fun with your evo and fragmented OS... Quitter... Hey you have a cow I have some "magic" beans for you. Lol.. No it's not fair but that's business. Sometimes when you invest in a company you must be prepared for the worst. I mean come on this lawyer wants the price of Palm to be based on an estimated what it's worth because of patents etc,etc.. That's ridiculous. That's like me buying a car with a friend it depreciates so in black and white it's worth one thing so I sell it for around that price then he tries to sue me cause at one point the car was worth more before I drove it off the lot. Ya well no sh*t it was worth more at one time... But that was then this is now,, value changes. In this case Palm was shopping around for the best company that truly wanted to do something with Palm instead of coming in merging for patent reasons. They were more interested in what makes Palm so good right now... WebOs.. Heres a better example.. Your trying to sell your puppy cause you can't afford it or you moved someplace you can't take it. You want to shop around and find the best person that you know is going to take care of it and treat it like you want it to be treated. Not abuse it and forget about it. Well you did now one of your family members is suing you cause you sold Mr. Tinkles for less then what his estimated worth is cause he's a pure bread bulldog you sold for mixbreed prices.. Come on that's just business and is completely retarded on suing Palm for... I wonder how much stock this lawyer or his client bought when it was at it's lowest. People are so damn sue happy in this country.. American motto anymore.."if I can't work hard and make money I'll just sue someone and become rich" that's why so many people are afraid to do anything anymore. Because of stupid crap like what this lawyer is doing. Ok done with my rant. I just wanna see Palm do well.. Mostly I wanna see this WebOs grow and on the HP Tablet... Ya Apples gonna poo themselves.. I love it!
End of day,it's just another Android.
O shut up about you stupid evo comments have you not noticed the main title of the site (PRECentral.net) Not Evo Central....
what happen to all of those that wanted to jump ship to the htc evo. where are you all now!!!!!!
Right Here ^_^ soon as palm makes another device i"ll switch back lol Depends on the pricing plans of the evo.
If palm wants to compete, IMO there should be a "Big Screen" phone option.
Still love my Pre though, it will be hard to let go.
EDIT And i still look forward to buying a webos Tablet!!!
Right here. Still probably will as I'm not entirely confident they'll have anything out worthwhile until next year. The EVO will provide more functionality for me now, as I keep the Pre as a backup. Still might hold off until the Pre actually breaks, so we'll see.
However, what I am looking forward to is a WebOS tablet. That would certainly kick ass so long as HP makes one w/o a 3G/4G card in it. I don't need it, it'll be used at home mostly.
And if you can tether to your phone your tablet doesn't need 3G/4G just wifi.
I think that HP could have defiantly put more money into buying Palm, but that they did what made sense for them as a business because lets face it Palm stock wasn't going up anytime soon. Besides they need to save their money for when they have acquired Palm :)!
"defiantly"???
He's probably hoping they will pay him to go away. I'm hoping they don't.
Bah go away lawyer!!
Considering that the stock for Palm sank to $3.71 on March 25 after following a steady decline since around the beginning of 2010, yes, I will have to say the $5.70 a share is fair. It's a business move after all and any business would work to get more profit in the long run. Hell, the stock price today was under $5. The highest it's been in April is $5.16. I think $5.70 isn't too shabby at all.
I agree with all the comments of it being a fair price. Like it or not, Palm was devalued in Wall Street and the press. While we, the Pre community, knew the value of the Pre - nobody else did. I know a handful of people that have seen my device, love the device, but haven't bought the device because of what's going on with Palm. They've all told me - why would they jump aboard a sinking ship? From valuations of Palm at 0 to $5/share, I do believe they took the best available offer that was on the table. I wouldn't be surprised that Palm spoke to Dell, HTC, Lenovo and others. But HP's probably one of the few companies that could take on the debt and still buy Palm at a price shareholders (especially Elevation Partners) would accept.
I remember a stock analyst valuing at $0.00 not too many weeks ago. There is an interesting article by Jean Louis Gasse (of BeOS fame) that explains that Palm was on a death spiral and really worth nothing. Without a cash infusion Palm, at their current burn-rate, we may have seen our paid webOS apps become unrecoverable after a wipe due to the palm cloud going offline. I think this indeed a bright day for the future of WebOS.
Considering I paid 7.50 a share, no - its a terrible deal. :O
But then, I sold half of them when it was over 15 a share, so I'm still net positive. :>
I expected a buyout price of 1.6-1.8 billion, but i'm no corporate investor. My guess was based on Palm's cash on hand, their upcoming device launch this summer (no official word on this but the rumors are out there), and some consideration of Palm's patent portfolio. I'm glad that this sale happened sooner rather than later since I'd hate to see the value of Palm weakened with another few months of cash draining and poor sales.
A lot has been said before in regards to the IP value of Palm. Gathering a figure for what Palm is worth is very difficult. Yes, shares were going for $15 but then some bad news came in and we all saw them tank, is this drop really a reflection on the actual value of the stock or a knee-jerk reaction to poor sales numbers? Be it a fair price or not, HP got one heck of a bargain. It would still be a bargain and twice the price.
Considering that I paid 4.20? Definately.
It was high, now it's not. Be glad you're being paid more than what the current stock price is worth. Now go away, you insignificant little lawyer.
*EDIT*: And no I don't think it was high enough, but I want the deal to go through and no one should stop it.
The lawsuit could actually be legitimate. What if Rubenstein took this offer because he knew he would keep his job? Maybe shopping for a better offer may mean that he could lose his job.
Rubenstein doesn't have the power of sole approval the deal. The Board of directors & shareholers (think Elevation Partners) do.
Keep calm and carry Palm. :)
Seems a fair price to me. One thing to remember is that since HP are buying stock they also get the debt Palm has along with it's assets. Last time I saw (a while back) debt was some $300 million+. That means the true cost of the transaction to HP would be 1.5 billion, more than fair IMO.
i believe the 1.2 billion number includes that debt? do shares outstanding x offer price and you land 250 million short of 1.2 billion...
You're right - it does include the debt already. Although there's clearly some other finance stuff going on because $5.70 * 167mm (shares outstanding) + the $387 million in long-term debt is almost $1.4 billion.
I think it was a steal for HP. The personal computer is not as important as personal computing. In this deal, HP has given itself access to an apple-contending OS ready to go. App development and distribution built-in. This will help HP, as well as Palm webOS, certainly the HP advertisement will do a great job with such a cool product. (Think Shaun White HP commercial!)
To credit Palm, they really tried. I mean they obviously fueled themselves on a make it or break it launch, late to the game, I feel that a single year was simply not enough time to build up excitement in such a great product. Marketing, branding were Palms other biggest mistake. To put so much effort into making something truly great, but have the legs knocked out by poor advertisement and commercials just sucked for them.
If HP makes a tablet with webOS, I'd buy one.
Ok, up to a certain point it may seem like a somewhat low figure, but looking at it from another perspective that they have done what they needed to do to make sure the hard work that has been put in not just continues but maybe even gets a better future.
Yeah, I'd say its fair. Personally I'm pretty stoked about the deal!
This lawsuit would never make it to court. The sale price was already approved by each company's board of directors. It's not like it was solely based on Rubinstein's decision.
I imagine stockholders would also vote yes (especially Palm stockholders) given that $5.70 is a whole lot more than it was a month ago, and that fact that Palm was just THAT close to going under.
I, for one, think it's a good deal for both companies.
I just listened to the confrence call! All I can say is WOW. They freaking love WebOS and said they are going to spend tons of money marketing it helping developers create apps and getting it to many devices. I am squealing inside like a little school girl. You must listen to the confrence call!!!!!!!!!
Palm without HP is worth not a penny over 5.70 if that. HP could wait and buy the employees and an almots bankrupt palm for 2.00 a share probably in Oct. or Nov. So HP should talk about pulling out and let the stock crash on all those greedy bastards and then buy it. But revenge never seems to work.
Given that I'm in at $10, no! This won't be the only of this type of suit.
1) if there is to be a lawsuit, they need to sue HP. They have the money.
2) This is a good deal for Palm & fair share price. Consider HP is paying about a 25% premium to Wednesday's closing price; further consider Palm was about to report earnings that were about 40% below analyst's expectations.
3) On CNBC, the analysts looked at #2 above & the consensus question was, if anything, why did HP pay so much?
4) This is a good deal for HP. It gives them WebOS. It gives them the patents. It gives them a new/different operating system to develop a LINE of products.
5) Cramer, like him or not, on his CNBC show--Mad Money--was one of the few analysts who thought this was a great deal. He didn't know if Palm could survive on their own & it would lower HP costs because they wouldn't be dependent on Microsoft systems. He thought it would save about $85 per unit & said the deal should pay for itself in about a year. He recommended a BUY on HP & a sell on MSFT.
You can't have a merger w/o law suits. This, like most, will go by the way side.
Well we all believe in Palm, so I think we will value palm higher. but honestly, if you're gonna make a fuss over this, palm is gonna go bankrupt, and that's that.
Just let it be, buy in HP, and watch the monies roll in :).
seeing as how all I've been hearing is that it would go for around 1 billion ever since they announced it, shouldn't we have been figuring that's how it was going to be.
I was wondering . Is he coming just alone with this. Are some stockeholders behind? I don
It's worth as much as it's worth. That's it.
I would hope to think that their patents are at least 1.2b but without a buyer palm would have faced real bankruptcy risk. while there are many companies that would love to have some of palms better assets, the reality is that once you have a an OS and hardware you have to stick with it and you can't just mash in palm into a competitors phone and make it work well. I think Lenovo would still be a good buyout option, they bring the same tablet products to the table, and in my mind better tablets as well as more experience in linux and hardware/software optimization.
It sold for what they could buy it for, that's a market decision.
From a fairness perspective, it sucks for people who bought stock above that price, but that's the risk of buying stock...
I think that they got it for a good deal is likely a good thing, as they are probably more willing to pump the needed cash into their new division to really get things going. A higher purchase price could cause them to put less money into development/advertising/etc, which would be a disadvantage for the customer.
So from a customer perspective, the price level is probably a very good thing. From a stockholder perspective, probably doesn't feel as much, but it happens, and it's certainly better than if Palm had ended up going bankrupt.
For me, it's unfortuate in one way, and fortunate in another. I'm going to lose nearly $9 a share, because I bought last fall, right after I got my hands on the Pre. I loved it so much, I sold my Apple stock, and bought Palm (and Sprint, which I've made about $10 on so far). Not the smartest decision, or the best timing, but I, like so many others, didn't know what was coming.
On the plus side, HP has deep enough pockets to fund Palm to success, and I was afraid Palm might not survive. Now we know WebOS will survive. I hope there is a 3g/4g competitor to the EVO coming from Palm this summer or fall. Much as I like my Pre, that EVO does look awfully tempting...
Even if I do try out the EVO, I'm pretty sure there will be another Palm in my future.
The beginning of a great partnership! I think that HP will infuse needed capital and help Palm to make end-roads into business markets where they don't already exists.
Look out RIM ... The Blackberry was never really a "Smart-phone" now business folks will learn what a Smart-phone really is!
Web-OS rocks! Now more folks will have a chance to see this!
Way to go HP! :)
Cry me a river, you did not make money on your investment. The stock market is a legalized form of gambling. Just because the house hit blackjack, does not open it for a lawsuit. Palm could have easily taken the route of Bear Sterns and WaMu.
5.70/share is a great deal - if anything it might be a little high. If this would have dragged out another quarter, we would have probably ended up with a much smaller deal and the end of webOS. I am pleased.
what's this here?
a webOS blog or a stock blog?
who cares about fair prices.. since when is capitalism fair???
tzzzzzzz......
"Fair price" is determined by the market, not some moron who bought the stock at it's high point.
Yes. Palm has been at $18/share and given the value of their products & IP, the original market analysts quotes of $14/share sound reasonable, but as brendilon points out, fair price is determined by the market and Palm has stumbled enough to make the current valuation fair. Not only that, think of it this way, the less money HP spends to buy Palm, the more money they have to invest in Palm.
I don't think $14/share sounds very realistic. They're running out of money, running at a loss, they have two products, both of which don't sell and are getting less valuable everyday sitting in a warehouse, their reputation has suffered, the impact of WebOS had been diminished by the fact that it is still incomplete, they are being tossed out of Verizon, Sprint is a small carrier, we don't know if ATT will get behind Palm's stale products, the company can't make a commercial worth airing,talent is starting to leave, the CEO has never used his chief competitors product, their currrent products didn't bridge to their former products...if you're gonna say its worth $14, why not say $40?
Stockholders get to vote on the sale, so this guy and whomever he represents get to vote just like everyone else. Precedence in thses cases is not on his side. Look at what happened after TWA went belly up, and a group of stockholders tried to come in at the last minute and buy up the rest of the company when the stock was worth essentially $0. The majority stockholders refused to sell, and the company was liquidated. Later, that group tried to come back and sue claiming the same thing as this guy: the company didn't consider "other" offers. The case was dismissed, and the stockholders in TWA lost everything.
Is this a fair price? Sure if you look at it this way: Palm is probably actually worth $8 a share (IMO), but they have debt and a huge inventory problem and they burned through a lot of their cash. All of those things weigh on the price per share. Plus, HP is buying all of it. Think quantity discount. And then think about what is going to happen after the sale: HP is going to invest BILLIONS in Palm and webOS. To attract them to buy, you have to keep the upfront cost to a reasonable minimum: They are definitely NOT going to see any profit from buying Palm for 5 years or so (after you figure in the cost of acqusition)so finding the sweet spot price is key. Considering Palm was at $4 or so when this all started, $5.70 is excellent! I will be taking my 40% profit to the bank with a big smile on my face.
Most lawyers are blood sucking devil things any ways...
This guy is a clueless attorney. He should be thanking HP for saving Palm stock from further decline and instead he's filing suit.