Palm's in Play

PDA pioneer Palm Inc. appears to be in play again, with sources saying the likely buyers could be Nokia Corp. (NYSE: NOK) or Motorola Inc. (NYSE: MOT).

Palm shares rose 6 percent in trading yesterday, as the rumor-mongering gathered momentum among the Wall Street set.

Several sources note that such rumors have made the rounds before, but this time they appear to be more serious. (See Palm & Handspring: Will They, Won't They?) They say that Morgan Stanley has been running the deal and that, in addition to Nokia and Motorola, one or more private equity players may be interested.

The company, whose shares have been beaten down among cutthroat competition in the mobile device market, is certainly drawing interest. A major hedge fund, Galleon Group LP , earlier this month reported in a 13-G filing with the SEC that it had snapped up just over 6.3 million shares -- about 6.2 percent of the 102 million outstanding shares -- of Palm stock.

"This is usually a precursor to some kind of M&A-related activity," notes Info-Tech Research Group analyst Carmi Levy.

Get all the details at Unstrung.

— Dan Jones, Site Editor, Unstrung