Palm Inc (NASDAQ: PALM) reported weak smartphone sales, weak average selling prices and weak gross margins last night. A triple whammy for the struggling device maker. Investors will need to see if new board members from Elevation Partners will have any impact on Palm.

Palm reported Q1 smartphone sell-through up 21% to 689K units; however, sell-through declined 8% versus the previous quarter, with average sales prices (ASPs) declining 7%.

Current guidance is for $370 to $380 million in revenue as the company cuts prices to remain competitive. Revenue estimate was for $414 million. As per the Palm-Sprint Nextel Corporation (NYSE: S) announcement last week, if Palm wants to hit the mass market, its ASPs are going to have to come down for quite a while. Gross margins came in at 36.3% versus estimates of 37%.

Also, Palm's next generation software will not be ready until the end of 2008.

All told, there is not much for investors to do here except wait. Any catalyst to drive this stock higher will have to come from the actions driven by Elevation Partners. The one positive for Palm is that it can produce some pretty high-quality products for relatively low cost, meaning it has some staying power. But this is one company that is in search of a product and a serious marketing strategy.

According to an article in yesterday's New York Post, the Forbes family-owned media business may come onto the market within the next two years, either as a direct sale or in an IPO. Last year, the family formed Forbes Media, including the namesake magazine web site, and affiliated properties, and sold off a minority chunk of it to the Bono-led private equity firm Elevation Partners. That deal was rumored at $250-$300 million for a 40%+ stake.

Forbes has done better than most in transitioning to the internet, pulling in over 12 million visitors to its web site per month, according to Compete.com, very near the readership of the Wall Street Journal web site. According to the Post, Forbes Media is currently valued at around $750 million, meaning half-a-billion dollars of equity could be up for grabs.

The move would be consistent with the family's ongoing divestiture of Forbes assets. In July, it announced the intention to sell the Manhattan headquarters that long served as Forbes headquarters. The building was not part of the Elevation Partner's purchase. It is expected to bring as much as $140 million.

Palm Inc. (NASDAQ: PALM), the struggling smart-phone developer, announced yesterday that shareholders approved the company's transaction with Elevation Partners.

The deal calls for Palm to receive a $325 million investment from Elevation Partners and borrow up to $400 million in debt financing. The cash proceeds will be used to pay a fat $9 dividend to shareholders. Elevation will gain board seats as partners Fred Anderson, Apple Inc.'s (NASDAQ: AAPL) former chief financial officer, and Roger McNamee, the long-time tech investor, will join the board. On their way out are directors Eric Benhamou and Scott Mercer.

Palm will also get Jonathan Rubinstein, the former head of Apple's iPod business, to become the new executive board chairman.

Palm pulled its new product initiative, Foleo, last week. Now it appears the device maker will try to outdo Apple by bringing Anderson and Rubinstein on board. However, the major ingredient that is still missing is that Apple has Jobs and Palm does not. Right now, Palm is a show-me stock -- show me the results before I jump into these shares.

InterDigital (NASDAQ: IDCC) volatility elevated as IDCC rallies off lows on contract win.

IDCC, a designer, developer and provider of wireless technologies, is recently up nearly 13% or $2.75 to $23.96. IDCC signed a seven-year licensing agreement with AAPL on 9/6/07. IDCC has customer licensing agreements with LG, NEC, Sharp, Panasonic, NOK & Sony-Ericsson. IDCC call option volume of 5,379 contracts compares to put volume of 222 contracts. IDCC September option implied volatility of 65 is above its 26-week average of 42 according to Track Data, suggesting non-directional price fluctuations.

Palm (NASDAQ: PALM) October volatility elevated into early October EPS.

PALM is recently down $0.25 to $15.32. PALM is expected to announce EPS on 10/1. PALM is developing a new handset operating system for its Treo product line. The new operating system is expected to be out in late 2008. PALM announced a strategic recapitalization with Elevation Partners on 6/4/07. PALM option implied volatility of 47 is above its 26-week average of 38 according to Track Data, suggesting larger risk.

Krispy Kreme Doughnuts (NYSE: KKD) volatility elevated as KKD trades near historic lows.

KKD operates and franchises 300 doughnut shops with over $450 million in revenue. KKD is down over 27% $1.73 to $4.60. CIBC says, "downgrading to Sector Underperform from Sector Performer on Flagging sales and liquidity concerns." KKD call option volume of 682 contracts compares to put volume of 1,465 contracts. KKD October option implied volatility of 69 is above its 26-week average of 45 according to Track Data, suggesting larger risk.

Daily options Update is provided by Stock Specialist Paul Foster of theflyonthewall.com.

Private equity and investors in general are beginning to open up their pocketbooks for technology. Palm Inc (NASDAQ: PALM) announced a deal with Elevation Partners which agreed to invest $325 million for a 25 percent stake in Palm.

Also, Avaya Inc (NYSE: AV) is being picked up for a nice premium, $17.50 per share or $8.2 billion by Silver Lake Partners and TPG Capital.

Ciena Corporation (NASDAQ: CIEN) went to market and issued $450 million in convertible debt. And earlier this year, Sun Microsystems Inc (NASDAQ: SUNW) picked up cash from Kohlberg Kravis Roberts in the form of a convertible stock.

Slowly but surely, private equity and investor interest in technology is picking up. This could be the very early stages of a big bull market run for tech stocks.

After months of speculation that smart phone company Palm (NASDAQ: PALM) would be purchased by a larger company like Nokia (NYSE: NOK), the company has taken itself off the market.

Palm will sell a 25% interest to Elevation Partners for $325 million. The company will compensate existing shareholders with a $9 payment, part of which will be financed with $400 million in new debt.

Part of the new arrangement is that Elevation has gotten several former Apple executives to join the company. One is Apple's former head of hardware development.

With the introduction of the Apple (NASDAQ: AAPL) iPhone just around the corner, and mounting competition from Research-In-Motion (NASDAQ: RIMM) and the large handset manufacturers, it is very hard to see what the deal does for Palm. It did not need to pay-out $9 a share to improve its products or marketing. It needed to get a larger partner.

Douglas A. McIntyre is a partner at 24/7 Wall St.