Palm, Inc. (PALM)

Scalability is PALM’s issue. When you can have 1 million phones on the shelf in the first weekend, you can sell 1 million. PALM can’t. They had 80,000 ready, so they only sold that many. After a month, everyone keeps talking and the appeal wears off. PALM is losing momentum. If they want to finance selling 1 million phones, they have to raise money to pay the OEM costs to build that many units. This stock is heading down!

This means they will offer shares UNDER CURRENT MARKET VALUE and drag down the current market price. If you look at their balance sheet, they have about 140mil more long term debt than cash. If they want to sell 2-3 million phones next year(highly unlikely), then they will have to raise a couple hundred million to pay their manufacturing costs. Instead of having a 136 million shares, they will probably dilute their float another 50 million shares at $10 or $12. Now we have a company with 186 million shares that is still not profitable(and never has been over their life), and will not be profitable for at least 3 quarters (SINCE NEW UNIT SALES WILL MORE THAN BE OFFSET BY R&D AND OUTFLOWS FOR MANUFACTURING).

PALM, for the next 3 quarters will struggle to scale and get their fundamentals in check. After more than a 1000% run, and facing imminent dilution, this stock will struggle to stay above $10. I doubt anyone smart (so DELL is still in the running) will want to acquire this company that does not have any international (hardly any) distribution and its own OS with no apps. PALM is now finally getting International distribution agreements, so by Christmas, they will start getting traction. I am sure they will build a bunch of units that will not sell after the buzz wears off.

Apple made this market with its own OS and great apps. Everyone else with a clue knows they have to go Android to get the apps to beat Apple. Think developer community!!!

PALM ignored Android and therefore will not have a developer community building cool apps for their phone. They are on their own. Again, scalability!! The PRE is a pretty good phone, but they are on their own in terms of user experience. They have to figure out a way to finance the apps and finance competitive next gen PREs that can compete with Apple’s user experience. Apple has thousands of developers builiding apps on their own at their own companies..and not being financed by Apple on their balance sheet.

PALM, yet again, is ignoring the true costs of creating a rich user experience. Why do you think this company is not profitable? It is the same reason they will continue to not be profitable. Some big dumb company that has not been competitive may want to acquire PALM, but they will face the same market issues with scaling this business unit.

WEbOS? Please. IT departments at most corporations barely want to even support Apple’s OS, let alone WebOS. Blackberry rules business robots. Apple rules the younger non-corporate generation. Pre will not penetrate either segment much.

Oompa Loompa doompa de Zune/I see a problem coming this June/Oompa Loompa doompa de doh/Soon you will see where customers go.

I hate to do this, but I've got to go with the herd on this one. PALM will underperform this year.

The enthusiasm for this stock is just getting ridiculous: PALM has quadrupled since Jan all on the speculation of fantastic sales of the 'Pre'.

I think the market is forgetting about two little-well-known names: Apple and Research in Motion..

The company we know today as Palm started out as Palm Computing, making software for HP and Apple handhelds. They launched their own branded hardware (made by 3rd-parties), then were bought by USRobotics. USR merged into 3Com a few years later, which is when all the original Palm Computing people bailed and started Handspring. 3Com spun Palm off as a separate company, which then bought the assets of bankrupt Be, Inc. and split its operating system and hardware divisions into two legally separate companies. The hardware division then bought Handspring (or was bought by them?) and operated under the PalmOne name for a while. The software division was called PalmSource, and it went nowhere - PalmSource merged into another unrelated company and sold the Palm trademark back to PalmOne, which then renamed itself Palm. Again.

But through all that, one thing has remained the same: a company promising way more than it can can deliver. They either promise features and capabilities the hardware/software can't quite do, or they develop good hardware and then can't manage to make enough of them to generate a profit before it becomes outdated.

Five or six name changes in 16 years, a half-dozen logos, and business plan shifts from selling software only, proprietary software with outsourced hardware, proprietary software with in-house hardware, in-house hardware with outsourced software, and now back to proprietary hardware with proprietary software for mobile phone carriers. And along the way their competitors have grown numerous, strong, and profitable.

The stock has gone up over 400% in less than a year based on little more than anticipation and rumors of better products to come, but I don't buy it one bit. All they need to make this fish story complete is a corporate headquarters in Belarus or Jamaica and an OTC- or BB-traded stock.

Yes, I am worried about the competition, and yes, I am worried about the struggling PDA market. But you know what? This is what makes a business stronger. Palm has a strong financial position, and they will be able to fight through this bump in the road. Palm has superior products (in my opinion), a very innovative management team, and is trading at a P/E of less than five (industry average is 17). If the P/E gets to the industry average, we'd have a 4-bagger. The market hasn't recognized or focused on Palm since the whole RIMM deal passed through, but it will again sometime over the next five years, and those who are patient enough will be rewarded.

Deep value. This company is just too darned strong to stay down here. iPhone expectations from AAPL I think contribute to negative sentiment (to say nothing of Palm's headaches, missteps and general malaise.) But--this is a company that makes good devices and has for a long time. Takeover or improve. I love my Blackberry, but I'm seeing LOADS of the new Treo phones with my corporate clients. I'm in for a year of outperformance. Insider ownership nice, too.

PALM is a $15 stock, are you kidding me? This stock has gone up 500% off it's $3 low. It's time to short this one. The Pre had way too much hype and it will not deliver. Jack Welch, GE's former CEO, did not get into any business unless he could be #1 or #2 since there is no room in the market to be the 3rd best producer of something. Palm cannot compete with Apple and Blackberry. I see iPhones and Blackberries everywhere but have not seen one person using the Pre. I've heard that customers have been getting fed up with this phone and there's been numerous returns. Plus, 30% of the shares outstanding are being shorted. This one should be sinking like a lead balloon. I've never seen such a high price for a stock that consistently loses money each quarter.

www.ShootTheBears.com

PALM will most likely underperform in the near term. The Palm Pre, while aesthetically pleasing, hasn't been a grand slam like the iPhone.

This stock could be a potential buyout pick if it drops to lower levels. They have a swell patent portfolio that could aide other tech companies. MSFT, maybe?

My quick comment on the Pre is that it has potential. The demos look good, but so did Storm. Right now it's all speculative until the units really start to ship. Which bring up the next point. We still don't know when they are going to start shipping these. The stock had a big run up after the CES announcement. No word on a ship date or pricing yet. If they don't ship in the next few weeks (which I think is doubtful since they haven't announce it yet) investors are going to get anxious and the price will fall. Like I said before this platform has potential but they must execute well and quickly.

The smart phone market is growing but there isn't room for all the players at least on the software side. Software developers are not going to make software for every platform out there: iPhone, Blackberry, Android, Windows Mobile, Symbian and Palm. Some have got to go and I think the end result will be a combination of propriety and open source OS's. Apple has a great lead with the software developed for the iPhone and RIMM has a very dedicated user base. Android is still young but could grow up fast and Windows Mobile just isn't going away. Symbian I've heard is good but I don't have any experience with it.

How are they doing financially? Palm is hurting. Profit margins are down about 55% while yoy quarterly revenue growth is down 45%. Debt exceeds cash by 172 million and EBITDA was -121 million. They need something to pull them out of this funk and if the Pre falters, things could get ugly.

Palm was a pioneer in this field, but as new devices came from everywhere else, palm had it's stale devices and stale os.

After many years of getting it wrong with reworking the Treo, palm has come out with a new device. Apparently the OS is very slick, and is considered one of the best around right now. Bad part is that it took them so long, and there are a lot of people that are reporting issues with the hardware.

I was looking to get a Pre, but ended up with a Storm, and I am glad I did.

I think Palm will sell a lot of Pre's (not as much units as Blackberry or Iphones) but they will sell a bit, then they will stagnate a bit, and then come out with a few other devices, but without anything stellar lined up.. yawn..

They should just license the OS to LG, HTC, Samsung, etc and they'll probably make a lot more money than screwing around with inferior hardware.

Palm got a 100 million from Elevation.
On one hand that's good because clearly they need cash badly
one the other it's bad because it's heavily dilutive to common shareholders and it probably shows they intend to burn through tens of millions of dollars per quarter next year as they have lately.
At any rate Palm faces a tough road ahead, tough competition and a weka consumer environment don't bode well for the stock.

Not too many companies out there sport a price target of Zero from street analysts but Palm has managed to do so.

December 18th, 2008

SAN FRANCISCO - Palm Inc. on Thursday reported a fiscal second-quarter net loss of $506.2 million, or $4.64 a share, compared with a loss of $9.63 million, or 9 cents a share, for the year-earlier period. Revenue was $191.6 million, down from $349.6 million last year. Adjusted loss was 73 cents a share. Analysts had expected the company to report a loss of 38 cents a share on revenue of $214.2 million, according to a consensus survey by Thomson Reuters.

Copyright © 2008 MarketWatch, Inc.

[OUCH!]

Nice run up in price over the last two months, but I doubt it will go higher in this market. In fact, I'm betting that profit takers will come in to drive this stock price down. And once it begins to fall, it may fall very quickly. A good selling opportunity.

I don't think the Pre is going to displace the iPhone - it's too little, too late, and the market has already made their purchases. I believe we're seeing the beginning of the end for Palm, which is unfortunate, because I really like their products.

Weak financials. Poor Performance of the Palm Pre.

Stock run-up has been huge and the pre seems to be a disappointment. I suspect that the price will drop soon when people realize that this isn't the next iphone.

Will short in real life

I will close my pick once they can prove they can sell a few million of these at a profit. Chances are I will be here a while.

Too many idiots love PALM... they can't be right.