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Topic: Will Palm's sale create a windfall for U2's Bono and partners? (Read 156 times)
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Emilio
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Will Palm's sale create a windfall for U2's Bono and partners?
Source: http://www.businessweek.com
Q: What's the connection between one of the world's top rock and roll performers and a sinking U.S. smartphone maker? A: Venture capital.
Bono, lead singer and a guitarist for the Irish rock group U2, is one of five professionals on the investment team for U.S.-based Elevation Partners, which has invested in Palm. News broke this week that Palm is actively looking for a buyer.
Palm's new smartphones failing to fuel sales
"U2's Bono set for multi-million pound Palm windfall" declares an enthusiastic headline at the U.K.'s Telegraph news site.
Of course, the same could be said of the other four members of the investment team, but they're not rock stars, at least not real rock stars.
There's only one problem with the Telegraph's prediction: How much of a windfall, if any, Bono and the other Elevation investors will get depends entirely on what a buyer is willing to offer. In fact, there's a chance Elevation may not even recoup the more than $400 million it has invested so far in Palm.
Elevation struck a "strategic recapitalization" deal with Palm in 2007, buying $325 million of a new series of convertible preferred stock, giving the fund about a 25% ownership stake in the handheld company. It brought on Jon Rubinstein, former senior vice president and head of Apple's iPod division. Also part of the deal: $400 million in new debt.
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