Palm Shares Drop 30% Friday
Shares in Palm Inc. took a hard hit following last Thursday's Earnings announcement. The subsequent investor conference call did little to settle wary investors either as shares of Palm Inc hit a new 52 week low. Shares of PALM closed at $4.0045 on Friday, down over a point and a half, more than 30% single day decline.
The sell off was also fueled by some new analyst predictions and pessimistic financial reports. Peter Misek of Canaccord Adams, dropped his price target on the stock to zero. Quoted at MarketWatch he reports...
"We believe Palm's troubles will only accelerate as carriers and suppliers increasingly question the company's solvency and withdraw their support, […] With what appears to be roughly 12 months of cash on hand, an accelerating burn rate, a complete lack of earnings visibility, and substantial debt and preferred equity, we no longer see any value in the company's common equity."
Other long time Palm analysts are certainly alarmed by recent developments but are not as apocalyptic. Mike Abramsky of RBC Capital maintains his outperform rating on the stock, although he has lowered his price target to $11 from $13. Stating…
"Our post-warning outperform thesis remains: it's too early for 'Game Over' given intact carrier commitments, product pipeline, and: 1) compelling, differentiated WebOS; 2) vertical integration advantages; 3) large underpenetrated Smartphone opportunity."
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