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Palm Smacked me back! Now what should I do??? Round 2!!!

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January 11, 2009 – Comments (2) | RELATED TICKERS: PALM.DL2

I just finished posting my pitch for Palm after I red thumbed it two days before it soared!  Boy a few lessons learned on that one!  Namely, don't red thumb a beleagued darling a day before a product announce!!!  I thought about just not putting a pitch in, waiting out my 7 day hold sentence, cringing in fear, and disappearing like I never was, but .... I'm never one to be quiet. My Mom used to say that if you don't have anything nice to say, bite your tongue until it bleeds.  I've tried biting my fingers so they couldn't type, but there's no stopping them.

Palm had gotten so  pathetic that any wisps of hope lifts the masses, and the stock, just past the point where the shorts live.....the shorts getting nabbed is some consolation, but it flares up the stock on an uptick with extra fuel!   Unlike the shorts, I can either:

    1. Ride this out, possibly watch the stock soar up and my points get eaten alive at a potentially endless rate, with no reduction  

    2. Get out, (but by the time the 7 day wait is over, the carnage is done). 

    3. Ride it out and hope it goes back down?   Darling Palm go down??  

   Well, Palm's balance sheets have more red, much more red than my red thumb I gave them.  They are just as red today as they were before their product announce.  They went from just over $1 BILLION in stockholder equity in May of '07 to NEGATIVE $400 Million in stockholder equity in Nov of '08.   Margins and ROE are down hard. That's a lot of vanished stockholder equity, and a LOT of Palms, “Apple Slayers” or not, (and I think not).   Of course nearly $1B of the decrease was in dividends paid out!  $9 per share in 2007!  So not all stockholders took a complete bath, mostly just the ones who jumped onboard just after the dividend!!!   The rest are only down 50% even after Friday’s rally!

 65 Million shares traded Friday, 2/3'rds of float!  Many must have traded hands more than once. Shorts covered and dumped?  Similar to the insiders who dumped at every peak the last few months!  They didn’t envision any more $7 per share dividends from the new release.

 Reviewing my fellow fools who red thumbed the last two days, and reading their well written pitches, I feel somewhat better.  99.99  Bravobevo,  (1/9, http://caps.fool.com/Pitch/PALM/3488012/good-marketwatch-article-on-wh.aspx) in particular gives me solace that maybe I can get some of my 82 points back!    

 I think I'll take my smack down and let it ride, thank you Palm, can I have another?  I just don't think PALM can fool that many people ALL of the time, let’s see if it can keep fooling me?

2 Comments – Post Your Own

#1) On January 11, 2009 at 6:43 PM, UltraContrarian (31.33) wrote:

Yeah let it ride, Palm is still doomed.  The next earnings report in February would be a good opportunity for a selloff.

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#2) On January 11, 2009 at 8:19 PM, TSIF (99.96) wrote:

Thanks!  Much like the Obama infrastructure package that won't show on quarterly reports for several quarters, I suspect investor enthusiasm will be short lived!    I'm still concerned that it wouldn't take much to move it positive even then, as Palm has a huge following, but lack of cash flow should reel Palm in whether the stock price does initially or not!   Red thumbs can cost you a lot of points for little gain. I think I need to rethink using them!  Nahhh..! 

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