Palm investor Mark Nelson, who owns
6.6 8 percent of the Treo mobile phone maker, wrote to the board urging them to consider selling the company, the Wall Street Journal
is reporting today, without saying where it got the information.
Mr. Nelson praised Palm's management in his letter, but he said the company is in a competitive market that faces "slowing innovation, commoditization and choked margins." As a result, Mr. Nelson wrote, Palm should "explore strategic alternatives, including a sale of the company." ... In his letter, Mr. Nelson acknowledges the rising share price of Palm and says the company is "in the ascendant." But he argues that Palm, which is one of the smallest players in a cutthroat cellphone market that is dominated by giants like Nokia Corp., faces such intense competition and likely commoditization that these "overwhelming market forces will render insignificant steps this [Palm] or any management can take."
Nelson bought into Palm in early 2004 when the stock was trading at around $10 a share. The stock has recently traded at around $40.
This is not the first time a Palm investor had tried to run for the money. In November 2005, the Swiss hedge fund company
Sagio Investments SA, which owns roughly 5 percent of Palm, wrote to the board complaining about the lagging company's stock price at the time.
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