Palm Stock Jumps On Acquisition Rumors

Palm shares jumped by more than 20 percent Monday following reports that Palm has put itself up for sale. The handset maker, which has struggled to find sales momentum for its well-reviewed smartphones and watched its fortunes take a dive in the past year, is said to be starting to entertain bids, and has hired two Wall Street firms to help it through the transition.

Bloomberg was first to report over the weekend that Palm is for sale, citing people familiar with the situation as saying Palm has brought in Goldman Sachs and Qatalyst Partners. According to the Bloomberg report, HTC and Lenovo have already begun looking under Palm's hood, and additional potential suitors may emerge over the next week.

The stock jump has been undoubtedly good news for Palm, whose stock price is down nearly 50 percent since January. After another earnings slump in March, Palm further stunned Wall Street by at less than half of what many analysts had predicted.

HTC and Lenovo have been the most-often-mentioned names so far, but numerous other reports since Bloomberg's story broke have speculated that some other big tech companies could soon be in the mix as well. Whoever ends up acquiring Palm would gain access to not only Palm's range of smartphones, but also WebOS, the company's proprietary mobile operating system on which its staked much of its smartphone growth.

Palm's Palm Pre and Palm Pixi phones -- which have since been expanded beyond Sprint to be offered, as Palm Pre Plus and Palm Pixi Plus, on Verizon -- were among Channelweb.com's 10 Coolest Smartphones of 2009. Palm also recently said it would look to an expanded relationship with AT&T, as well.

Next: Focus On Potential Buyers

The consensus watchers appear to have focused on the following potential buyers:

HTC: Both Engadget and Gizmodo, as well as other reports, have HTC has the clear frontrunner. Having emerged as a commanding smartphone maker in the past two years -- especially for handsets like Nexus One and Hero that run Google's Android OS -- HTC acquiring Palm would give it WebOS and further strengthen HTC's ties with carriers, as well as award it Palm's portfolio of patents.

Lenovo: As the other suitor mentioned in Bloomberg's report, Lenovo is more of a question mark. The company recently entered the smartphone game itself with the announcement of the LePhone, and has shown plenty of willingness to expand beyond its PC-maker core into adjacent markets.

Nokia: The world's handset leader could gain a new foothold in North America -- a market it's struggled to crack, even with its dominance in the rest of the world. But what would Nokia do with WebOS when it already has Symbian and Meego, both of which it's invested so much time and energy?

Dell: Dell? Really? Believe it. With Dell starting to experiment with its own Android-based smartphone, the company could thrust itself into the handset conversation without having to develop its own mobile OS or start from scratch on the hardware side.

Huawei: Though considered a long shot at best, Huawei has a commanding presence in China, one of the hottest smartphone markets in the world and poised for explosive growth in the coming years.

Who's going to buy Palm? Leave a comment in the ChannelWeb Connect community and let us know your thoughts.