Palm stock plunges on downgrade, down 23% for month 42
Tue, 27 Oct 2009 10:33 pm EDT 
Investors in Palm aren’t going to look back on October 2009 with glee. For the month, shares in Palm are down 23%, closing today at $13.38 (down 6.3% for the day), after ending September at $17.46. Last month Palm’s stock was run up by a short squeeze, upgrade talk, and rumor of a takeover from Nokia, but since then the stock has been almost nothing but down, including more than 10% just yesterday and today.
For the past year Palm has traded violently, often outpacing the market in gains and losses (thankfully, the market’s been more up than down recently). The stock was hit hard today by analyst Tim Long at BMO Capital Markets, who downgraded Palm to “underperform” (the company will not meet expectations). Long stated that he believes, “Android will step up in importance at many operators, which, ex-Sprint, would put PALM in the position of fourth OS (AAPL, RIMM, Android) and sometimes even lower.” Additionally, Long also thinks that the Pixi, due to be released in less than a month, will only provide a modest bump in Palm’s numbers, and at the expense of Pre sales at that.
So is Long right? He has a valid point, and that is that Palm is one underdog company with their one OS and two phones competing with Android from multiple manufacturers on carriers worldwide, not to mention the powerhouses that are RIM and Apple. So how can Palm ever hope to gain larger dominance? By breaking pursuing an open relationship with Sprint instead of the sometimes boggling commitment that they have with the carrier.
For years Palm’s biggest launches have been on Sprint and devices have taken several months to migrate to other carriers. By the time they get there, it’s yesterday’s news. We get that Sprint has been good to you Palm, but we all know they’re small potatoes compared to the customer base of Verizon and AT&T. Future webOS phones need to land on bigger networks first or sooner if Palm wants to have a shot at a significant share of the smartphone market.
42 Comments
Yea, they need to make them selfs more public with the other carriers and other stuff.
Palm Pre FAIL...
The spam filter won't let me express myself...
Wow, is that an indication that the blog is cleaning up the comments? Awesome! Way to go Deiter!
Huh! Are the analysts saying it's time to SELL Palm stock? ... Guess it's time to buy again.
please do
I'm about to dump my Pre for sluggish performance reasons alone.
There are many sexier looking phones out there. Being a Sprint rep, I cannot tell you how many returned Pre's Ive seen due to the pathetic hardware.
Small Screen, Plastic housings, tiny rubber keys.
Very reassuring to know there's competent staff like you plugging this phone so well and providing such excellent support for your clients. (Tongue in cheek)
Im not here to be a Sprint nor Palm fan boy. I tell it like it is.
Good Sprint Rep, tell it like it is! I'm also fed up with people defending the hardware when build quality is horrible. Even they know it, but won't admit it.
One of the many reasons I bought the pre was because it was smaller than the rest of smartpones.
The pre screen quality is quite good actually, better than a HTC Hero.
So, hypothetically, if I get fed up enough with the Pre, I can bring it into Sprint and get something else (e.g. maybe a Hero) and I won't get charged for it?
I believe Sprint has a 30-day return policy. If it has been over 30 days since you purchased your Pre, you're out of luck.
:(
are all comments more than a sentence being moderated now?
What's going on around here??
(sigh) Again with the "hardware issues." I think if things fail for the Pre it's because of a misled word of mouth and a lousy ad campaign.
I have a Pre. My wife has a Pre. Neither of us have had any problems. Those few who have are a vocal minority.
I think you're the minority.
I agree.
I think the minority who have problems are just more vocal. Return rates for hardware have been shown to be on par with other Smartphones. The 4 I know of are still original, including mine and my wife's.
Palm Pre since release day. Happy times no problems
Seriously, I've had my palm since 6/6 and have not had any hardware or software issues, and have loaded plenty of homebrew apps - no patches though, just apps. This is a great phone, though I wish it would hide contacts like PalmOS would.
As a user, I am frustrated by the horrendous speed.
As a developer, I am embarrassed that I have spent so much time on my app, and it runs like crap. This is NOT JavaScript's fault, this is webOS.
It's not the network. Palm had some good ideas and designs but stumbled on execution. Lets stop blaming external factors.
"Palm had some good ideas and designs but stumbled on execution."
+1
the concepts are great, but the implementation not so much.
I wanted to write about it in more detail, but got flagged as spam...
All I know is that after 9 months of *eagerly* waiting for a GSM Pre in Greece (or even an unlocked version that properly works), I went on and bought an Android phone (HTC Magic) yesterday. People can't wait forever Palm.
Yeah, I agree with the assesment of Palm showing up late to the other carriers. By the time Palm Shows up on AT&T or VZW everyone will already know that the Pre is a failure. Everyone that has tried my PRE walks away unimpressed.
What makes you think Palm needs Verizon or Att's crappy network for the Pre to be successful? It launched in America in June, just recently launched in Canada and parts of Europe. The downfall will be, the redundant apps.
Spent 20 hours this week to set up two Pres with terrible support from Palm and (even) Sprint. Investors better see the stock dive as a wakeup call and get Rubenstein to read this forum and focus on the iissues before it's too late. John..15 yr techie Palm fanboy who's very disappointed with setup, performance and support.
While I like the Pre, I am envious of some of the phones heading to Android, even WinMo. I hope that Palm makes a more grown-up device that can compete, hard-wise, with some of the other higher-end devices on other OS's.
Don't count Palm out yet! Palm's stock price has skyrocketed from a low of $1.14 to a current $13 in thew last year and has actually beat Apple and Nokia:
http://finance.yahoo.com/echarts?s=PALM#chart6:symbol=palm;range=ytd;com...
If Palm's Pre is such a bad smartphone then how's Pre/WebOS is winning kudos from the media, like PC World, Popular Mechanics, C-Net, WSJ etc. ? Is Palm buying those editors , or those media editors smoking grass ?
Palm instead of building the hardware have HTC do it.. An HTC hardware phone plus WebOS equal gold..
Wha!? Have you owned an HTC phone? First, UGLY. Second, HTC has the worst standard of build quality I have ever seen, period.
HTC phones, in comparison to the Palm Pre, are the angel's work.
I am on my second Pre.
First one had a huge gap with oreo twist.
I get a refurbished one with the oreo still on there. This one has speaker headjack problems as well. It makes my phone feel cheap everytime I pick it up.
I hate the fact that they give refurbished ones... no wonder people are on their 3rd or 4th Pre.
I love the idea of the software. If it was a bit faster I would say everyone should jump ship to the Pre.
However, the sluggishness in opening apps and running them and the cheap feel of the hardware is making me say "ugh" everytime I pick up my phone.
Please do not mark this as spam. This is a legitimate response. I love Palm and I wish the best for them... but being realistic is necessary.
All of the "grass is greener" folks need to hop the fence, already. In time, they will look back and realize its greener here after all (since it always is). :D
so you think encouraging people to leave a platform helps the platform? foolish.
There are lot of things I love about my Pre, but the sluggish response in the Phone app is not one of them, and the pitiful market share isn't helping my confidence now, either. I doubt that I will still be on the webOS platform come 2011 when my contract is up.
Palm needs to do is supersize the screen pronto.
Every other phone manufacturer recognizes the iPhone screen size can't be underestimated.
Simply a hot webOS is not enough, and less-hot OSs succeed on a iPhone comparable-size screen.
Have developers ever commented on whether the screen size is sufficient for their needs?
>Have developers ever commented on whether the screen size is >sufficient for their needs?
The developers care about screen resolution and the Palm Pre has the same resolution than the iPhone, the pixels are just packet in a smaller space
We have two Palm Pre phones - purchased 4 months ago, and they are absolutely perfect - both hardware and software, as new as the day we bought them. The processor is fast, and WebOS is awesome. I am starting to suspect that a lot of iPhone users who are jealous about the Palm Pre are trolling these sites to spread their lies such as... I work for Sprint, I own a Palm Pre, etc., etc.
The initial manufacturing problems affected only a very small percentage of Palm Pre users, and those issues were addressed and fixed in August 2009. Check the news if there are any reported problems of late and you will find zero; which is pretty good for a brand new phone that is only a few months old.
A few of these analysts have been downgrading the stock for ever, yet Palm's stock keeps going up. Palm is covered by over 20 analysts, so we should look at the general consensus when forming an opinion on a company. It's stock has been very volatile all year long, so this is not surprise.
RIM stock has also dropped 30%.
RIM (maker of the Blackberry phone) stock dropped from 85.77 in September to 60.78 today. Well that is a 30% decrease in one month. RIM stocks dropped by 4.66% today (reflected in the numbers above).
Apple hit a high of $208 on Oct 21, and today (one week later) it's at 192.40.
True investors are looking at the long term prospect of a company and not a one month movement in its stock. If you have any questions, ask Warren Buffet.
As for Android, I hear a lot of noise about it, but no one has provided any numbers on sales. It is estimated that the Palm Pre sold 600,000 last quarter, how many Android phones did they (HTC and others) sell? It seems that the Palm Pre is competing against a phone that no one knows how many are selling.