Comments on: Palm Stock Falls with the Tech-Heavy NASDAQ
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And Coms is now trading at -7.82 and your point is???
So who is buying Palm shares right now? The same people who have bought them all along. Real investors really should be capable of doing simple math.
um, ok im stupid but...
RE: um, ok im stupid but...
But don't buy it if you want to cash out in a couple of months. The Markets are a little nervous right now and Palm is going to lose money or just break even for a while. Here's a quote from their most recent SEC filing:
"We also expect to incur some duplication of costs over the next 12-18 months, as we build the infrastructure for a stand-alone public company, while also paying 3Com to perform these services under transition service agreements. In addition, for at least the next several quarters, we expect to incur costs related to our separation from 3Com. We anticipate that our operating margins may be lower over the next 12-18 months as compared to recent quarters, and there may be several quarters in which we report operating losses as we invest to expand our business, take advantage of market opportunities and execute our strategic plan as an independent stand-alone company."
Palm Stock Continues Dropping
Ok ok I see I have to explain coms shares v. palm better...
Scenario 1: You buy 100 shares of 3Com at todays price of 39 1/16. Total price 3906.25. When 3Com does their distribution in a couple months they will GIVE you 152 shares of Palm just for owning 100 shares of 3Com. Assuming the same price today of 28 5/16 (for Palm)that means you will have been given 4303.50 worth of Palm shares- Plus you will still own 100 shares of 3Com- who's value will certainly be less without Palm but definately worth more than zero.
Scenario 2: Alternately you could use 3907.13 to buy 138 shares of Palm right now and in a couple months after the distribution you will still own 138 shares of Palm- No more, no less.
Now as an investor, for your 3900.00 and change which would you rather own? 152 shares of Palm plus 100 shares 3Com? Or would you rather own just 138 shares of Palm? Both options cost exactly the same. The only differnece is the the first option you have to hold on to your 3Com shares and wait a few months for.
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