Bono's Elevation Partners loses another $50 million in the afterhours on PALM

Bono is a major investor in Elevation Partners run by Roger McNamee. They made and have now lost a fortune betting on the hapless PALM.

PALM's financials today were even worse than anyone expect tonight. And PALM is selling off yet again. It has finally broken through $5.

The company shipped a lot of phones (960 K) to carriers which is great. There was only one problem. Very few of these phones (408K) where actually sold to consumers. Estimates were for 500-600K sold to consumers. So now there is inventory at the carriers of nearly nine months of sales. So as you can imagine, the company isn't planning to sell many phones next quarter. They are estimating revenues of $150 million - down from $316 this quarter - and I can't imagine they will sell anywhere near that much.

Elevation partners owns 42% of the company – 67.8 million shares and some preferred. Their average price is just over $7/share. So a little math shows that they has a profit of over $750 million at the peak of $18.09 and now just a few short months later, they are down about $140 million dollars. Poor Bono. Maybe he will have to go back on tour. I am short 5,000 shares- so maybe I can afford to buy a ticket.

Joshua Avram
Joshua Avram: MD, Wash U; BS, Yale. A noted cardiologist, the doctor applies his medical knowledge to his investing in large pharm and biotechs. The doctor has correctly predicted several very exciting biotech acquisitions over the past several years, including the acquisitions of Esperion (Pfizer), Amylin (Bristol Myers) and Imclone (Bristol Myers). The doctor is presently long Novo Nord

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Comments

  • Gottaget Itright

    March 19, 2010

    No - that 408,000 wasn't sold to end-consumers. It was sold to end-consumers and other retailers and perhaps even other wholesalers.

    Palm went out of their way to clarify that "sell-through" does NOT just mean "sold to end-consumers".

  • jsoc

    March 19, 2010

    @Gottaget Itright.

    You are indeed correct. But what does it matter? Who cares if the true sell through to consumer is 375,000 or 408,000.
    Either way the company is failing, and has no real chance to turn things arround.
    I just wish my broker had more shares available to short.

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