“The latest dust up occurred yesterday with the company pre-announcing its quarter, dramatically slashing its revenue outlook in the current quarter and for the full year.
And then, an internal memo from CEO Jon Rubinstein was leaked which suggests that Palm’s top domestic carriers, Verizon and Sprint, have stopped ordering new phones. Which would all be bad enough on its own,” Goldman writes. “But the story has another angle worth examining.”
“Let’s take a look at the chronology here: On February 11, rumors began to circulate that Palm’s Chinese manufacturing partner had suspended work on Palm’s Pre and Pre-Plus smart phones,” Goldman reports. “When asked about this, Palm released a statement saying that because of the Chinese New Year, and because of the new deal with Verizon, the company was ramping up ahead of the holiday, and then would resume manufacturing afterward. Palm also made a passing reference to trying to keep manufacturing in line with customer orders. But it was its casual connection to the Chinese New Year that made a suspension in manufacturing no big deal.”
Goldman reports, “So, when did Palm know about that? A source at Palm confirmed to me this morning that the company did in fact know three weeks ago that Verizon and Sprint had halted new orders of the company’s phones… Analysts I’m talking to are furious. Management has a serious credibility issue, I’m told, and this only makes it substantially worse.”
Goldman writes, “The company seems to be playing fast and furious with the truth. Analysts are wary. And judging by the company’s continuing plunge, investors are throwing in the towel. Difficulty competing in the marketplace is one thing; losing trust is quite another.”
Read the full article here.
[Thanks to MacDailyNews Reader “Macaday” for the heads up.]
Somewhere I hear a flush and a Palm scream slowly fading away….
These days it’s hard to find anyone without a credibility problem except for Apple.
Maybe… but CNBC? Talking about credibility? Get real.
Has all the fingerprints of a Fred Anderson (holding company) operation.
Translation: Time for Palm to quit jackin’ around and throw in the towel….?
CNBC lacking credibility?!?
You sure!… After all, the Obamanites all flock to MesSNBC as a trusted news source!
Maybe Obama can use that TARP for Palm’s sake? TARP’s been used for everything else outside its original intent!
CNBC doesn’t report about the Market, they are openly and blatantly manipulating the Market for the gains of their “stars”.
If Palms big Venture Capital Fund partner cuts Palm Loose or the VC’s Money dries up for Palm I’d give them 60 to 90 days before filing for bankruptcy. Their VC Sugardaddy may even force Palm into a liquidation to recover at least some of their money as I’m sure the VC is Palm’s Largest Investor and controls enough of the company to control what it does.
Old Company’s that end up seeking Venture Capital Funds to stay in business are always doomed to failure. If the company isn’t strong enough to get money from a bank then they are not normally strong enough to stay relevant in a competitive market place either. Most Companies operating in very competitive industrial segments like smart phones have to be strong companies with some very big and deep pockets. Palm and it’s VC sugardaddy really don’t have either.
For Palm to survive they need to be praying for a buy out by a much bigger company. I think Palm as something to offer the right company, But the right buyer is not Microsoft, Apple, Nokia or Google. The Right companies might be LG, HTC, Samsung or even Sony Ericsson. Palm as an independent company is dead and should have died long ago. Palm needs to openly start shopping for a buyer if they don’t then they are doomed to have the bones of the company sold for next to nothing to Microsoft or Google who will pick the ones they want and scrap the rest in their black pits of Unused code a long with the Palm Name. Most of the employees will be terminated before or at the sale and the rest (executive management my get new positions with the buying company) will just be sent to the Unemployment Queue.
@demon…
You’re probably right. *shrug*
But, no Asian company would be willing to buy them. Palm is too far gone.
MaWo: ‘schools’. As in, ‘Which ones did Rubenstein go to?’
Someone else has a credibility problem, eh Jim? Definitely with me and, likely, with most Mac users and anyone who watches The Daily Show and saw the Goldman video clips.
Pot and Kettle, Jim.
I’m very happy for Bono and Jon.
“Analysts I’m talking to are furious.”
I’d say these analysts should read MacDailyNews about these issues and maybe they wouldn’t get caught with their pants down. They deserve the reaming they’ll get.
Its obvious. They did after all “leech” their way into the iTunes ecosystem when they introduced that Pre POS.
@ Rot’nApple
Liberals actually know that MSNBC is biased and partisan. Little secret for ya. They make no ‘fair and balanced’ claim.
Any analyst who didn’t see this coming should lose their job. Sales have been dismal, the decision to partner with Sprint for an exclusivity deal had to be purely cash-driven, and the production quality issues are alarming.
All Palm has left is its WebOS. I don’t even think bankruptcy would help Palm except to liquidate it; there’s nothing there of value besides WebOS.
Gotta love it. One week, Jim Goldman is a hero for saying things about Apple that MDN readers want to hear, and the next he’s a goat, for saying things that are unwelcome.
Make up your minds, folks.
@ Demon – I agree with you.
If what you say about a VC being a major investor in Palm is right, then the investment committee in that VC needs its head examined.
The four most crucial decisions (and also the most difficult) that the VC/Private Equity House has to make regarding an investee are:
Decision 1: current performance shows that the company is in deep trouble and we have to do something about it (we can no longer buy the storyline the CEO & management team is feeding us as their strategies have failed)
Decision 2: specific members of the management team, in particular the CEO, have to be replaced with immediate effect as they are unable to set a strategy, execute it and deliver results
Decision 3: the new replacements are: [name names etc] and it will take ‘x’ months to bring them on board
Decision 4: the new strategy to be pursued by the replacements is (specify the new direction) and it will take ‘y’ months to implement and realise RESULTS
The problem is in the amount of time it takes to arrive at a clear position in each of these decisions. This is particularly so when an investment executive involved in sourcing the deal who also sits on the Board of the investee company is challenged to make Decision 1 as in many cases, said executive has often ‘gone native’ and is unable to confess to his peers that an investment of his choice has gone bad on his watch.
Then there is the ‘cummulative bets’ problem: betting on new talent; who in turn bets on its new strategy; then betting on the down-beaten staff in the company to execute it; all done in a fast evolving marketplace with a player like Apple that is setting an agenda designed to continually wrong-foot its competitors…
Realistically, in the absence of strong balance sheet (and large cash reserves), very few companines can survive the time it takes to work through these four decisions AND deliver positive results. And unless they are already working on this, 60 to 90 days is not enough for a turnaround to happen.
This is where the words Michael Dell once carelessly threw at Steve Jobs (and is probably regretting right now) need to be levelled at the CEO of Palm:
SHUT IT DOWN AND GIVE THE MONEY BACK TO THE SHAREHOLDERS
oh well, its not as though the end of Palm hasn’t been predicted…
…it will only be the timing which will be a surprise. and it sounds as though that may come soon enough. who is buying Palm phones if Verizon and Sprint are not?
@Rot’nApple: So, I’m guessing you think Fox news is legit?
Thy end draws near.
I think the phrase you’re looking for is that Palm is playing fast and loose with the truth, not fast and furious.
Looks like the game is over.
Palm is up for sale…