Well what do you know – Harbinger Capital Partners doesn’t just have aspirations of creating a satellite-based 4G LTE mobile broadband data network in the US (not to mention an enormous pair of… you know what), it’s also banking on smartphone maker Palm. Literally. Harbinger has just reportedly put up what we have to imagine is a veritable fortune to buy a nearly 10% stake – 9.48%, to be exact – in Palm.
According to documents filed with the SEC, Harbinger is said to have snatched up 16 million shares of Palm stock. It’s unclear how much the hedge fund paid for each share in Palm, but the sheer number of shares involved in this deal couldn’t be cheap by any means.
The move follows a recent announcement by the New York-based hedge fund to create a nationwide LTE (long term evolution) wireless data network based on SkyTerra’s satellite network – which itself was recently acquired by the cash-flush group. Harbinger is led by investor Phil Falcone. Their goal is to bring satellite LTE service to the entire US by the end of 2015.
It’s not clear how Harbinger sees Palm fitting into their grand plan. As it stands, Palm is hard-up in the smartphone space. They’ve failed to gain significant market share with their webOS-based Palm Pre, Palm Pre Plus, Palm Pixi, and Palm Pixi Plus smartphones. They’ve burned through much of Bono’s cash. And, they’re on the brink of being wholly sold to the highest bidder. Does Palm have any value for a group that wants to create a novel LTE network? Maybe Palm chief Rubinstein’s defense of Palm made an impression on Falcone.
Perhaps Harbinger just sees value in Palm itself. Maybe they’re thinking that Palm will increase in value once they’re acquired by an outside company. Either way, Palm just got a serious cash injection with this deal. Let’s hope it goes to good use.
SEC filing can be found here.