Activist investing is suddenly all the rage. You know the stories, don't you? Private Capital ManagementdemandsKnight Ridder (NYSE:KRI) sell to the highest bidder. Kirk Kerkorian tellsGeneral Motors (NYSE:GM) to cut its dividend. And so on.

As of Tuesday morning, you can add Palm (NASDAQ:PALM) to the list of companies under investor assault. Mark Nelson, founder and former CEO of Ovid Technologies, who owns roughly 8% of Palm's outstanding stock, is urging the board to sell the company. His argument, however, is anything but typical.

Nelson writes that the good times won't last for Palm and that selling now will afford investors like him a premium. This sums it up nicely:

"I confronted a similar situation in the late '90s as CEO of Ovid Technologies, which I founded in 1988. Because of its product innovations, the company flourished and went public (NASDAQ:OVID) in 1994. In late 1997, I became acutely aware of market forces that, in the future, had the potential to limit the company's growth and affect its relatively generous product margins. At the time, Ovid was still growing revenues and profits. Nevertheless, with the Board's approval, we hired Goldman Sachs, which negotiated a sale of the company at the end of 1998 for $200 million. As I had feared, subsequently the market for Ovid's products stagnated and changing dynamics squeezed margins for Ovid and its competitors."

In other words, if you're an investor in Palm, you can expect that increased competition from Research In Motion (NASDAQ:RIMM), Motorola (NYSE:MOT), Nokia (NYSE:NOK), and even Apple (NASDAQ:AAPL) will lead to depressed margins and slowing sales.

I'm not sure I agree, but I applaud the argument. It's refreshing. Instead of trying to force a sell-off to glean marginal value from an ailing business, Nelson is asking the board to sell while enthusiasm for its products is near an all-time high. There's sound investing logic in that thesis.

And I find other elements of Nelson's argument very compelling. For instance, he writes that Palm's Treo smartphone, which has become the lifeblood of its business, may be subject to the whims of carriers. This resonates for me, since my local T-Mobile store recently stopped carrying the device, citing quality issues. (Specifics weren't provided.)

Still, the smartphone market is at what appears to be the early stages of a massive expansion. There's no reason to believe Palm wouldn't participate in that growth, leading to higher multiples to earnings and cash flow.

Such an outcome can't be guaranteed, however. That's why I can't fault Nelson for taking action. After all, he's only looking for ways to boost his returns, as any good investor should. And his (in my opinion, misguided) approach is as refreshing and real as you'll find in a market too often defined by dreamy hype artists, circling vultures, and petulant bankers.

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Fool contributor Tim Beyers owns shares of Nokia but uses a Treo 600. Go figure. You can find out what else is in his portfolio by checking Tim's Fool profile . The Motley Fool has an ironclad disclosure policy .