New Phone Sends Palm Shares 35 Percent Higher, Is The Hype Justified?
January 9, 2009 by Tisa Silver
Filed under Finance
Palm’s new phone might be smart, but what about its investors?
Shares of Palm (Ticker: PALM) rose 35 percent on Thursday and opened 18 percent higher on Friday. What is the fuss?
Palm finally showcased its new smart phone, the “Pre,” at the 2009 International Consumer Electronics Show (CES) in Las Vegas. Palm also unveiled its operating system, Palm Web OS, and a new wireless charger called the “Touchstone.”
According to comScore, Inc., Palm’s current product offering held about 16 percent of the U.S. smart phone market as of October 2008. The Palm Pre, which will compete with Apple’s iPhone and RIM’s Blackberry, has garnished some high praises.
Unfortunately, high profits justify stock jumps NOT high praises.
For a stock to run up like this, I would expect the phone to include a concierge service and a “Beam me up, Scotty” feature!
I would wait for the favorable reviews to materialize into something more tangible. Perhaps sales or profits?
Unless PALM can show me the money, don’t believe the hype!
(Image source: Picapp)
Not to question you financial expertise (mostly because I have NONE) but I believe you’re selling the technological advances on this phone short. Now I know you have to be concerned with the poor historic management decisions at Palm and their delay in getting innovative product to market. And I know their market cap is 200m and RIMs is significantly more, and the iphone has delivered heaven on earth, etc, etc. But Palm really has delivered with the tech part of this product.
This really is revolutionary as it is truly the only “mulitasking” smartphone out there. Full disclosure: I have a bundle of Palm stock…no seriously I have no financial interest in palm. I do, however, have a new centro and an old 650 on my lines. I have been waiting for this new phone for years and so have many others. Most techies and tech mags were pretty psyched.
They are giving sprint half-year exclusivity for the product. I am a sprint user as well – so yes, BOTH of these companies can screw up this launch. We will see.
Good blog btw.
Revwkm – Thanks for the comment! You are right, my opinion of PALM in this post was based more on PALM’s past as opposed to its future after the release of this new phone, charger and operating system. It sounds great and probably is great! The current stock price should be a reflection of how much people value the company’s future earnings, but my concern is that investors may go overboard and inflate the stock too much too soon. I would like to see PALM make a comeback.
Does Palm really have 16% of the smart phone market, in terms of current sales? The data I’ve seen (November 2008) lump Palm together into the “Other” category (with less than 5% total) after Symbian, iPhone, RIM, and Windows Mobile.
Gary, thanks for the comment. I was referencing PALM’s domestic market share as of 10/08. Click on “comSource, Inc.” within the post and there are more details. Also, there is a good article on Fox, here is the link: http://www.foxnews.com/story/0,2933,478446,00.html