Mac and iPhone maker Apple outbid smart phone makers RIM and Nokia and purchased beleaguered cell phone maker Palm in a totally cash deal worth nearly $700-million. RIM had offered $5-billion in stock to purchase the struggling Palm, but the deal was rejected by Palm’s shareholders. Apple’s stock rose nearly $2.00 on the news, while RIM’s stock tanked, dropping almost 6-percent. Palm’s stock, on news of the buyout by Apple, surged 4-percent. Apple offered $4.00 per share for Palm’s stock.
No webOS For You!
Apple CEO Steve Jobs said the company’s plans for Palm were simple. Apple would close down the struggling smart phone maker. Jobs, in an interview with Walt Mossberg of the Wall Street Journal:
I’ve always recommended that Palm close down and give the money back to shareholders. I’m glad we could help Palm achieve our goals.
Palm employees were given the option of severance pay or continued employment with Apple. Apple COO Tim Cook said the company has many unfilled cafeteria and landscaping positions which are an obvious fit for the skills of Palm’s engineers.
What of former Apple executives and engineers employed by Palm, many of whom are responsible for copying the iPhone’s features and involved in developing Palm’s webOS, often described as a clone of Apple’s iPhone OS?
Apple’s Steve Jobs:
Our former employees at Palm will be offered positions at Apple, too. Missionary or doggy style.
Roger McNamee of Elevation Partners, one of Palm’s major investors, said the deal would be good for investors, especially him.
This is a fabulous deal for
me Elevation PartnersPalm shareholders and customers. Finally, we get our money backwe have an opportunity to reinvest our resources in future projects.
All Palm’s smart phone customers will be given a $100 discount coupon toward the purchase of an iPhone. An Apple spokesperson said the coupon deal could cost Apple “thousands and thousands of dollars.”