Palm Corp. announced on Wednesday that Harbinger Capital has procured a 9.48% non-voting stake in the company worth approximately $83 million USD.
Harbinger Capital Partners is an investment group that specializes in so-called “event/disaster strategies,” or investing in companies that are positioned for tremendous growth, or in companies that have valuable IP, but have fallen on hard times.
Harbinger is headed by billionaire hedge fund manager Philip Falcone, who has made several key inroads into the tech sector, most recently with last month’s $262 million purchase of SkyTerra. Harbinger intends to spend up to $4 billion on SkyTerra to develop the property into a wireless 4G infrastructure provider for American cellular carriers.
The $83 million stake in Palm is significant as it can be used to a variety of ends. First, Harbinger could convert their passive share into an active one, allowing the group to command direct influence on Palm’s board should the company take an unpleasant direction. Harbinger could also trigger a selloff should it wish to suddenly be rid of what turns out to be a poison investment in a great many shares. Finally, the $83 million could be a testing of the waters; if Harbinger like what it sees, the company has the liquidity to acquire the flagging handset firm and take it private.
For now, however, Harbinger’s investment does nothing to aid or injure Palm. The $83 million investment comes in common stock, the sort traded on the NYSE, which does not constitute a cash infusion.
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