This morning truth is stranger than fiction. Palm announced a strategic stock sale to private equity firm Elevation, a five way partnership between musical genius Bono, Apple iPod pioneer Jon Rubinstein, and three other executives.

We believe investors will respond well to the news. Shareholders will retain 75% ownership of the company and receive a $9 per share distribution financed by a $325 million cash infusion from Elevation and a $400 million debt offering. Elevation is acquiring preferred stock convertible at a 16% premium over recent trading levels.

Consumers have reason to be optimistic as well. Given the entertainment industry background of Bono and Rubinstein, there is reason to expect a renewed focus by Palm on multimedia, an area meaningfully underexploited by the company in its existing devices. On the other hand, many in the Palm community are longing for a dramatic improvement in the hardware specifications and operating systems of Treo smartphones. It's unclear how well suited the new team is to bring about such a result.

Upon closing, Jon Rubinstein will become Executive Chairman of the Board. Fred Anderson and Roger McNamee, managing directors and co-founders of Elevation, will also join Palm's board of directors. They will be replacing Eric Benhamou and D. Scott Mercer.

The press release and conference call details are available at Palm.com.