For Palm (Nasdaq: PALM) shareholders, hope springs eternal.

Just weeks after my esteemed Foolish colleague Rick Munarriz raised up a rogues gallery of potential saviors for the fast-approaching-oblivion Palm, the market rumor mill is at it again, churning up likely (and unlikely) suspects who might be willing to give Palm a hand. The latest theory: China.

Specifically, Chinese tech star Lenovo. Rumor has it that the Big L is looking to expand its mobile footprint, and may follow on the heels of fellow Chinese acquirers who've been picking over the wreckage of Western Capitalism, snapping up pieces of everything from Ford (NYSE: F) to Huffy lately. Suspicions that Lenovo might bid for Palm sent Palm's shares up 20% yesterday. But is there anything to the rumor?

Survey says: No
Judging from the price spike at Palm, it seems speculators (or perhaps short-sale closers) are giving the rumor credence. But over at Kaufman Bros., the experts tend to disagree. Asked to opine on the possibility yesterday, Kaufman allowed that, yeah:"Lenovo is possible, but I'm not sure they have the balance sheet for this. Hewlett-Packard (NYSE: HPQ) is definitely more plausible."

You're half right
Seriously, Kaufman? The H-P theory again? I thought we had put that rumor to bed last month. But, OK. If it's still buzzing around out there, I'll make one more attempt to swat it down. So for those who missed it last time 'round, here's the list of potential Palm buyers -- and why none of 'em will work out:

  • Nokia (NYSE: NOK) doesn't need Palm's OS. (It's already doubling down on Symbian).
  • Microsoft (Nasdaq: MSFT) doesn't want it. A Linux-based operation system is anathema to the Giant from Redmond.
  • And as for H-P ... like I said before, H-P's just too durn smart to buy a loser like Palm. Plus, are our memories so short? Have we already forgotten H-P's expanded alliance with Microsoft, announced just three months ago? I seriously doubt H-P's going to go rocking the boat so soon, offending Mr. Softy by buying Palm.
  • Dell (Nasdaq: DELL)? Yeah, Dell's dumb enough[EB2]  to stick its hand into Palm's hornets' nest. But fortunately, Dell's still busy trying to get Perot in hand, to entertain thoughts of further expansion. Not gonna happen.

Unlucky in Lenovo
Which returns us to where we began: Lenovo.

Kaufman tells us that Lenovo's lacking the cash it would need to buy Palm. On the one hand, I'm inclined to argue otherwise because to me, Lenovo's balance sheet looks pretty plump, stuffed with $3.8 billion worth of cash and equivalents, versus less than $825 million in debt. Plus -- as I've said before -- I think Palm is worth precisely $0. If that's the price it's charging, then Lenovo might very well ante up. (On the other hand, that wouldn't be particularly good news for Palm's current shareholders.)

And the other other hand: It's entirely possible that even a $0 price tag won't be low enough to entice Lenovo. I mean, few people would believe that Lenovo's previous high-profile high-tech acquisition resulted in resounding success. To the contrary, word has it that Lenovo experienced serious "integration" problems after buying IBM's (NYSE: IBM) PC business back in late 2004. Lenovo has managed to generate a total, companywide profit of less than $500 million since the acquisition closed nearly five years ago. That's hardly a sparkling return on investment from the $1.75 billion it laid out. Nor is it a result likely to encourage further foreign adventures on Lenovo's part.

Foolish takeaway
No, Palm shareholders, I'm afraid the Lenovo buyout rumor is just that: A rumor. No white knight's riding to save you from this investment. But who needs Lenovo, anyway? If the Pre turns out to be as big a success story as y'all were predicting last year, that shouldn't matter. I'm sure Palm will do just fine on its own.

Not.