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Posted by: Adrienne Carter on July 21
Bono, the U2 lead singer, seems to be the latest pitchman for BlackBerry. His band’s latest album release, No Line on the Horizon, features prominently on the mobile device maker’s home page. The company also is sponsoring the band’s current tour.
But this deal seems like a conflict of interest, as peHUB Wire, a private equity industry newsletter, recently reported. After all, Bono is a managing director and co-founder of Elevation Partners. Among the private equity firm’s biggest investments in its $1.9 billion portfolio: Palm, one of BlackBerry’s top rivals. The investment shop owns about 40% of Palm’s outstanding stock. Remember also that Bono was hawking Apple products before his BlackBerry gig, a point several readers pointed out.
As peHUB Wire writer, Dan Primack, puts it: “[Bono] might as well take out a fullpage ad in USA Today, saying: ‘If you’re going to switch to a smart phone, don’t bother with the Palm Pre.’” Put another way it’s akin to the CEO of Coca-Cola making a commercial for Pepsi, Microsoft hawking for Apple, or Tom sponsoring Jerry.
Ironically, Bono’s bet on Palm is the better one right now. Shares of Palm are up nearly 200% over the past 12 months. Research in Motion, which makes the BlackBerry devices, is down nearly 40%.
BusinessWeek's Adrienne Carter, Jessica Silver-Greenberg, and David Henry deconstruct the mysteries of high finance, Wall Street, and hedge funds for pros and ordinary investors. E-mail them directly if you've got tips about big deals, a hedge fund, or even securities industry gossip.