Palm Loses RadioShack Support, Key Executive: Report
Palm appears to have lost the support of retail partner RadioShack, according to a report, as well as a key webOS executive. In an SEC filing, Palm detailed a new incentive program for retaining employees - which includes quarter-million-dollar cash bonuses.
RadioShack stores are letting supplies of Palm Pre and Pixi smartphones run out, with no plans for replenishment, the Dow Jones Newswires reported April 19.
RadioShack has sold the devices through an agreement with Sprint Nextel - Palm's carrier partner in June 2009, when it launched the Pre and made a bid to reinstate its leadership position in the mobile device world. A spokesperson for Sprint Nextel, however, confirmed to Dow Jones that RadioShack will phase out the products to make room for two new phones from Sprint, though he declined to offer additional details.
The news comes as Palm executives have hired Goldman Sachs and Qatalyst Partners to help find a company interested in acquiring the ailing smartphone maker. Analysts have lobbed around the names of potential prospects, from Research in Motion to Motorola, Nokia and Huawei, for reasons ranging from Palm's U.S. market presence to its patent portfolio. It's strongest asset, however, is generally agreed to be its webOS platform - and, presumably, its webOS development team. Which made it particularly bad news for Palm to have its senior vice president of software and services, Mike Abbott, resign.
PreCentral reported April 16 that according to an SEC filing, Abbott's last day will be April 23.
In the filing, Palm details that it has begun implementing a retention program - including quarter-million-dollar cash bonuses - to help keep other key employees in their seats.
"The program includes equity awards and cash bonuses to be earned over a two-year period, provided that the individuals remain as employees of the Company," the document states. It goes on to name the Palm employees who are part of the program and explains, "Each received a grant of restricted stock units pursuant to Palm's 2009 Stock Plan and a cash bonus of $250,000."
Palm shares rose by as much as 20 percent on April 14, following news that Philip Falcone's Harbinger Capital owned a nearly 10 percent stake in Palm. However, following news of Abbott's departure, and RadioShack's stepping away, stocks fell again.
In the early part of April 20, Palm shares were trading at approximately $4.69, which was down 4.67 percent.