• San Francisco Chronicle, Tuesday, December 23, 2008 11 AM

Palm shares soared 22% Monday on the news that private equity firm Elevation Partners, whose principal investors include U2 frontman Bono, had injected $100 million into the ailing handset maker. News of the cash injection, which ups Elevation's stake in the firm from 25 to 38%, helped ease the stock's steep decline over the past three months. Palm finished the session up 56 cents to $3.05.

Just last week, the Sunnyvale, Calif. tech giant reported a 45% slide in fiscal second quarter revenue, citing declining phone sales. According to the San Francisco Chronicle, "the disappointing performance, coupled with a dwindling cash reserve of $143.6 million, had prompted some investors to question whether the company had enough money to fund its operations over the long term." Palm's Treo and Centro line of smartphone recently fell behind Apple's iPhone and Research in Motion's BlackBerry. The company is now staking its future on a new but long-delayed operating system, Nova, which will be released in January.

Valleywag's Owen Thomas points out that supporting Palm further distances Bono from Apple CEO Steve Jobs. Not only is Elevation investing in an Apple competitor, but Bono, the firm's managing director, has managed to wrest away former Apple executives Fred Anderson, now at Elevation, and Jon Rubinstein, now at Palm.

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