Rumors have been circulating for a while now that Palm has retained banking advisers to assist with the possible sale of Palm to another company. The once king of the PDA market and a pioneer in the smartphone sector has fallen on hard times with its Palm Pre and Palm Pixi failing to live up to sales expectations, and it has begun to look like a sale may be the only possible solution for the corporation.

jon rubinsteinOnce again, Palm CEO Jon Rubinstein has made me question his ability to run a company such as this.

In an article from the Financial Times on April 22nd, he told the newspaper that “I believe Palm can survive as an independent company.  We have a plan that gets us to profitability.”  He went on to state that the company has $592 million in the bank, but analysts at JPMorgan are estimating the company will have to burn through at least $534 million of that before they reach a break even point sometime in 2012.

Mr. Rubinstein did say that the company would entertain buyout offers from other companies, “If someone comes to the board with a reasonable offer of course it’s something we have to consider,” he said.  He also wouldn’t confirm that the company has hired banking advisers, but that is fairly well-known at this point.

So how would the company survive by staying independent?  He stated he was also looking at the potential of licensing WebOS, the critically acclaimed operating system behind the Pre and Pixi, to other cell phone manufacturers to help Palm back on the road to profitability.  As I discussed in a previous article about how there is no saving the WebOS at this point, that doesn’t seem like a very likely scenario.

Despite his strong claims that the company could move forward, this could be an attempt to stop the departure of more executives from the company.  Ever since the rumors first arose that Palm was looking for a buyer, top management has been abandoning ship which could damage the value of the company in a potential sale.

Taking more air out of Mr. Runinstein’s proclamations of remaining independent, Reuters reported that Lenovo, the fourth largest computer manufacturer, has suddenly emerged as the leading contender to buy the company.  Not only that, but there was quite a bit of information that Huawei passed on bidding for the company, and HTC passed after it reviewed Palm’s books.

So, which is it Mr. Rubinstein?  Are you going to fight to stay independent, or are you actively courting potential bidders?  I asked some time ago if he was crazy, and I’m beginning to think I may have undershot my guess.

What say you?  Should Palm sell or should they fight it out?