Fidelity Now Owns 11% of Palm Inc

Posted By: Ryan Wednesday, September 10, 2003 7:20:50 PM

Fidelity Investments, the largest U.S. mutual fund manager, has boosted its stake in Palm Inc. to 11%, according to Bloomberg Business News. The purchase makes Fidelity the company's largest shareholder and may be the likely source of the two previous undisclosed investments.

Fidelity owned 3.19 million shares of Milpitas, Calif.-based Palm, the world's biggest maker of hand-held computers, as of Aug. 31, according to a filing with the U.S. Securities and Exchange Commission.

Fidelity owned about 4,100 Palm shares as of June 30, according to an earlier filing, Bloomberg reported. The biggest Palm shareholder as of June was Mellon Bank Corp., with 807,755 shares, or 2.8 percent of the company

Less than two weeks ago, Palm Inc. reported it had completed a $19.1 million equity offering for 1.2 million shares of Palm common stock at $15.90 per share. The news was preceded by a similar $18 million dollar (1.2 million shares) deal the week prior.

The shares were issued today to institutional investors through Palm's existing $200 million shelf registration on file with the Securities and Exchange Commission. Palm had approximately 29.3 million shares outstanding as of July 25, 2003.

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11 % more than me

Hal2000 @ 9/10/2003 7:44:56 PM #

Woo Hoo. First post.
I thought Sony would take the first shares

"One hour martinizing! Who is this guy martin anyhow?"

RE: 11 % more than me

orol @ 9/11/2003 10:43:59 AM #

sony is not interested in palm inc but in palmsource (where they already have some stocks) .

RE: 11 % more than me

pen_n_paper @ 9/11/2003 11:19:08 AM #

That confuses me, why would Sony want something of PalmSource?

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RE: 11 % more than me

abosco @ 9/11/2003 12:41:39 PM #

>>That confuses me, why would Sony want something of PalmSource?

To have a say in/control the present and future of the OS.

-Bosco

RE: 11 % more than me

JonathanChoo @ 9/11/2003 2:23:06 PM #

I believe PalmSource should be co-owned by the 2 big players in the PalmOS arena - PalmOne and Sony.

RE: 11 % more than me

pen_n_paper @ 9/11/2003 2:25:36 PM #

Co-Owned? Really? With those two big bullies bossing that company? Nah, just let them be, let them do what they want..we don't want the mistakes of Sony to shift over to the Palm Operating System do we?

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Previous investments

abosco @ 9/10/2003 9:52:50 PM #

>>and the likely source of the two previous undisclosed investments.

I disagree. I still think TI investing 20 million into Palm makes more sense. I see little reason to continue to use their chips besides that.

-Bosco

RE: Previous investments

helf @ 9/10/2003 10:56:54 PM #

And why is that? They are great cpu's. xscale has no real benefit over them. You may argue MHZ numbers.. but whats in a number? :)

RE: Previous investments

Gar @ 9/11/2003 12:19:12 AM #

I'm always amazed at how thing link together that we only learn about later on down the road. Does anyone know what this means to have Fidelity 'own' a chunk of Palm? This opens doors? They keep their stocks or sell off later - quickly? Are they backed by M$?

-----------------
My wife has to sell a lot of candles (www.ccandles.com) to buy her new Palm.

RE: Previous investments

robrecht @ 9/11/2003 6:48:26 AM #

No conspiracy here. At most it means Fidelity analysts think Palm will do well. Investment companies and fund managers have to buy real stocks. It does seem like a pretty high stake in one relatively small company.

Thanks, robrecht

RE: Previous investments

couvreur @ 9/11/2003 8:04:14 AM #

Well the Fidelity Blue Chip Growth Fund is HUGE: 20B$
So even a small stake of 0.1% means investing 20M$ in one single stock.
For comparison, that fund invest 5% of its asset in Microsoft: 20 * 0.05 = 1B$ !!!!!

RE: Previous investments

Timothy Rapson @ 9/11/2003 8:05:01 AM #

I don't see the reason why you would connect this to the other 50 million that was silently invested before. If that was kept secret and this is made public, then why connect them. Either Fidelity would want both public or both quiet.

It makes far more sense that TI invested before and got the preference for chip use for Palms first OS 5 models. At that time, the investment was not called a cash infusion, but a return of some sort for an investement of some sort. I think TI gave Palm a $50 million line of credit that they could put on the books, and in return got the promise that the money would only be used to buy TI chips.

TI kept this quiet so that all the phone manufacturers that use their chips didn't demand the same deal. Fidelity would have been touting such and investment to the hills and all who would listen in order to drive up the stock price and increase their profits, as they are doing with the current 11% investment.

RE: Previous investments

anjrober1 @ 9/11/2003 8:48:28 AM #

Couple replies on the comments above. First, Fidelity is most definitely not backed by MS.

Second, it's very unlikely they made a secret behind the scenese infusion of cash into Palm. Their investments in Palm are for various mutual funds. This is all public knowledge. Go to fidelity.com and you can find lots more info about their funds.

RE: Previous investments

dustbunny44 @ 9/13/2003 2:07:40 PM #

the law requires that an entity purchasing more than (I believe) 4% of the stock of a company must make public the purchase or change in status.

Things are looking good for Palm

a3 @ 9/11/2003 11:25:25 AM #

Ever since the Zire 71 and T!C, everything is on track. Now letsjust wait for the T!T3 mayhem!!!

Am I just to optimistic?

____________________________________________
Former Tapwave's Helix fan, now a T|T3 fan.

RE: Things are looking good for Palm

helf @ 9/11/2003 12:14:55 PM #

heh.. No, your not. Palm seems to have finally gotten their act together.

RE: Things are NOT looking good for Palm

The Ugly Truth @ 9/11/2003 11:04:56 PM #

Ever since the Zire 71 and T!C, everything is on track. Now letsjust wait for the T!T3 mayhem!!!

Am I just to optimistic?

Unfortunately, you are being too optimistic. If Palm had been able to sign up Dell as a licensee, the future may have looked better for the platform. As it now stands, they just have too many problems to overcome and are going to see market share erode quickly in the coming months.

The T|C was an overpriced bomb and the T|W was little more than a hardware beta that managed to get a few suckers to purchase bite. (Remember the Palm VII? Meet its daughter, the T|W. Can you say abandonware?) The T|T² is a solid design that shows Palm still employs a few creative individuals, but the realities of Palm's product cycle limitations resulted in this being relased a year later than it should have been. The target has moved and Palm is about to miss again. PPC makers are poised to begin dumping some very inexpensive hardware onto the market (just in time for the holiday sales) and they can now smell blood. Sony has finally finished their beta hardware testing/sales with consumers and in a couple months will be releasing a PDA that has what power users have been requesting for so long. Except it will cost $650.

Puppies like Palm just can't keep running with the big dogs unless they have very savvy leadership. They don't. It's now too late for Palm to do anything but cash in on the value of the OS while it's still dominant. Expect a sale early in 2004. Nostradamus says you should mark January 15, 2004 down on your calendars.

Sometimes the truth just isn't pretty™