Bono-backed Palm investor stands firm

U2 front man Bono’s investment firm says it won’t pull out of Palm, despite the device-maker’s share-price hitting a 14-month low on Friday.

Elevation Partners, which has two influential founders on Palm’s board, backed the device maker after its share price dived 29% the day after it reported its 11th straight quarterly loss for fiscal 3Q10, and cautioned revenues in the current quarter would fall short of analyst’s forecasts , Reuters reports.
Net loss in fiscal 3Q10, which covers the three months to February 26, was $102.8 million (€76 million), far higher than analysts had forecast , ZDNet reports.
Palm’s management reportedly said revenues in its 4Q10 would be $150 million, half the amount that analysts predicted, according to Canada’s, and down from $366 million in the third quarter.
A spokesperson for Elevation Partners quoted by Reuters, blamed Palm’s ongoing poor performance on short-term execution issues regarding its mobile operating system, but backed the firm in the long term.
The private equity firm has invested a total of $460 million in Palm since 2007, and currently holds a 30% stake in the device maker.
However, Palm has reported a net loss for the past two years, meaning if Elevation Partners made the same investment today, it would get a stake of up to 70% , reports.
Elevation Partners has also put former Apple men Fred Anderson and Roger McNamee on Palm’s board, and current chairman Jon Rubenstein is a former employee, who also developed Apple’s iPod.
Bono is one of six partners who founded Elevation Partners in 2005.