Palm Shares Close 17% Higher on Sale Talk

Shares of Palm Inc. (PALM) closed 17.05 percent higher, at $6.04, on Monday as news reports circulated that the smartphone maker has at last decided to sell to a stronger company.

Talk of M&A on Palm’s part has swirled for several weeks. Palm, maker of the Pre and Pixi, once was the leader in smartphones and PDAs but has toppled from its perch as consumers have clamored for the Apple Inc. (AAPL) iPhone, Motorola Inc. (MOT) Droid and other rival devices instead.

The Wall Street Journal reported on Monday that Palm has hired bankers to explore financial options, including a sale.

The timing is prescient. Palm recently warned that its current-quarter revenue will be far lower than expected because it shipped more phones than it was able to sell.

Last week, the latest rumor had it that phone maker HTC or computer-maker Lenovo would be willing to buy Palm. Palm’s shares responded well to the talk.