My Intriguing 16 PALM Shares

Posted on April 29, 2010 by dmoynihan

So, I’m following Palm’s stock in the wake of their announced acquisition by HP.  And it’s funny, but I don’t think this is the final deal quite yet.

Palm’s currently priced at $5.81.  HP said it would buy them for $5.70. Based on my experience with companies that get acquired (like, well, Handspring, which Palm bought, leading to me having these shares), after the acquisition announce’s, the stock price of the acquired company surges, but never to the exact amount they’re being bought for.

So, Palm, which was $4-something yesterday, should be around $5.50 today, if the deal was pretty much set in stone. There’s a little bit of risk that PALM shareholders don’t approve, or HP’s biggest shareholders sue to halt the purchase, or whatever, so the share price won’t hit that last $.20 cents until the day of acquisition.

Instead, the price of PALM is over $5.70.  What the market says here is that it thinks maybe someone else will be buying PALM, or at least, that that isn’t the final purchase price.  Given the way PALM’s one-third owned by Bono, or however that went, story isn’t quite finished just yet.

About dmoynihan

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  • http://ipadtest.wordpress.com Mike Cane

    Any other buyer for Palm would be a disaster — for *everyone*, including the general public. hp is the perfect fit for them. Not Asus and certainly not — EVER — Nokia.

  • Omar

    It certainly is interesting. I have Palm stocks too.. not sure what I wanna do with them at this point. What do you plan on doing?

  • http://www.munseys.com dmoynihan

    I’m just holding, but, PALM was the result of me dropping $1k in my IRA on Handspring many years ago. I kept 100 shares after the merger, and then with the drop in PALM, and my broker getting bought, I would have lost money on the sale most years.

    I’d say hang on.

    /Disclaimer: at this point, I mostly a bunch of companies in the Bakken… ‘cuz I never thought Congress was gonna open up the coasts for offshore drilling.

  • DMcCunney

    Palm being acquired by HP strikes me as about the best deal for Palm. Rumors were that Lenovo and HTC both did due diligence and passed. No surprise: Lenovo makes desktops/laptops, not handhelds. Their incentive would be getting into a whole new market segment, but I suspect they decided that wasn’t what they wanted to do. Take on Nokia and RIM on their own turf? No, thanks. HTC is the actual manufacturer of devices for a lot of people, including Palm. I suspect they saw nothing but potential problems from people they built for that *weren’t* Palm if they went for it. Can you say “conflict of interest?

    The incentive for anyone currently making handhelds/smartphones in getting Palm would be to kill it off, but what spend money? Palm was headed in that direction anyway.

    What I’m curious about is the same thing I was curious about when Palm canceled the Foleo, pointing to then in development WebOS and saying they wanted a single OS platform for future development – would we see something that *wasn’t* a smartphone based on whatever it was?

    There are rumors now of a Google tablet based on Android, which answers my question about when Android might get dropped into something not a smartphone.

    Meanwhile, HP gets an established brand name and an additional entry into a market segment they probably *do* want to be in, and they have the finances to make a go of it. We’ll see.
    ______
    Dennis