Palm Inc. (NDAQ:PALM) shares spiked $1.41, or 8.73%, to $17.50 in early trading today after the company announced that it would sell a 25% stake to a private equity partner that will bring former Apple Inc. (NDAQ:AAPL) executives onboard. Elevation Partners announced that it would purchase the stake in Palm for $325 million - a substantial premium to Palm's valuation - and bring in new leadership that may help Palm finally turn itself around.

The company began the process of exploring strategic alternatives earlier this year as many speculated that the company could become a buyout target for device makers interested in the company's technology. This new move, however, is welcome news for investors who jumped the stock price in support. Among the new executives being brought in is Jon Rubinstein - the company's co-founder and top product designer who helped pioneer the hit iPod.

Some investors remain skeptical, however, as to whether or not the company can compete with such a small market cap compared to others like Nokia. While the deal announced today does not specifically address that issue, the company does plan on introducing a number of new products and technologies to broaden their offerings. Meanwhile, the new talent will ideally help the company use these new offerings to take market share away from existing competitors.

Clearly, this private equity involvement is good news for all involved. Palm's plans to extend their product line and take on great new management personnel illustrate their commitment to improving shareholder value. This makes PALM a stock worth watching!

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