Back in the day, over ten years ago, PalmPilots were a major step forward in electronic organizers. I had, and still have, an ancient, non-communicating Sharp Wizard, in which I store contact information and notionally keep a schedule.
PalmPilots added a local communicating capability which made them a coveted toy among young professionals. I think it's fair to say they were the first widely-used PDA.
How things have changed. The Journal article noted that the RIM Blackberry and Apple iPhone swamped the PalmPilot.
Though Palm eventually brought out its own integrated PDA/cell phones, they became also-rans, having great difficulty being accepted by the major cell networks, ATT and Verizon.
The nearby price chart of Palm and the S&P500 Index illustrates how the firm's fortunes stalled, then plunged, in recent years. It's now down about 50% in value from five years ago.
According to the Journal piece, common equity holders have little chance to realize any gains, since private equity group Elevation got very sweet terms for a $460MM investment in the company that gave it a 1/3 interest.
While the article cites one analyst as valuing Palm at $600-700MM based on research and marketing 'assets' from spending, the company's nearly $600MM of cash might be more indicative.
Palm seems to be a prime example of Schumpeterian dynamics. Once a category leader, it failed to anticipate or deliver on the next big thing in its space, the integration of PDA and cell phone. As a distant third in the race, it just isn't really worth much anymore.
When is the last time you even saw someone with a Palm Pilot?
I suppose some entity might eventually bid some fraction of the alleged value of the firm, as the cash is spent. But it's not even clear what the patents or brand are worth anymore.
It's a lesson in the way markets are supposed to work. Rather than expect some government intervention to save every job and company in sight, Palm illustrates how ailing or failing companies become low-priced fodder for some other entrepreneur, thus clearing the market of old assets and recycling them, if possible.
For an unfortunate example of intervention, read the next post.
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