Wall Street Not Sure Palm (NASDAQ:PALM) Will Survive

Friday, March 19th, 2010

After terrible estimates for the fourth quarter and expected sales of some products not meeting expectations, Wall Street is beginning to ask the question of whether Palm (NASDAQ:PALM) can survive or not; or at least if it survive on its own.

The share price of Palm plunged another 18 percent after news of the lowered estimate emerged and pummeled the stock.

Information from a number of wireless carriers confirmed the ongoing struggles of the company, as reports are they continue to have a lot of inventory of the phones, meaning they're not selling them because demand is way down.

Probably the major disappointment has been the Pre, which was actually received well when it first came onto the market, but has been very sluggish in sales in contrast to what investors had been looking for.

Many are starting to think the extreme drop in Palm share price, which is now around the $4 range, could make it an attractive acquisition for the right company. In the past the stock had been too hefty to be considered taken over by a competitor.

On the negative side, if no one is interested in Palm, it would either have to find a way to raise more capital, or it could literally run out of money. Profits aren't expected to return for at minimum a year, and it could be much longer than that depending on its performance during that time.

The problem Palm now faces is they need something to happen fairly quickly before news gets so negative that nobody would touch them. Someone with deep pockets would have to show an interest, as the difficult economic times and still tight credit markets make it almost impossible for a smaller company to absorb them.

Article by Gary B

The views expressed are the subjective opinion of the article's author and not of FinancialAdvisory.com

Tags: palm , telecommunications

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