S&P upgrades Palm credit rating 8
Wed, 28 Oct 2009 8:59 pm EDT 
Standard & Poor’s Ratings Services has upgraded Palm’s credit rating to the level of CCC+, a single notch away from no longer being considered a dangerous speculative play in the stock market. The upgrade comes as a result of Palm’s expanding webOS portfolio (with the Pixi on the way in less than three weeks) and the company’s recent secondary stock offering that raised some $360 million for operations.
A CCC+ rating is considered to still be in the highly speculative realm where the company is deemed to be highly sensitive to economic conditions. Given the current state of the global economy, it is little surprise that Palm is considered by analysts to be at the consumer’s whim. Even so, S&P believes that so long as the economy doesn’t turn incredibly sour, Palm’s chances of long-term success are good, even with a significant amount of Palm’s debt coming due in 2014. The CCC+ is still a long way from the gold star AAA rating that cash-flush competitors Google, Apple, and Research in Motion enjoy. The credit rating serves to quantify the risk that lenders take on by extending credit or loans to a company.
Despite the upgrade, Palm stock was down again today, tumbling another 5.9% after dropping 6.3% yesterday. For this week alone, shares of Palm are down 15.6%, and for all of October PALM has slipped a painful 28%.
8 Comments
which is no big deal a concern though the stock market has also hurt apple slipping 201 a share to 197 in a day as well as rim economy is still suffering though it is getting better palm will be ready to really move in january once webos 2.0 or so is released and the app store is in the 500s. What palm needs to focus on when updating is the basic patches that preware offers so that preware can move on and focus on other things like landscape mode on everything, notificatios, etc. Also palm needs to go ahead and work with preware developers and make a very optimal virtual keyboard from the one preware has now to give the option to the average customer to use the slide keyboard or not. Also in the update add the video capabilites or help preware do so, and keep improving the battery life those basic things will place the webos pre ontop with no lagging basic issues and these new phones the verizon droid and n900 will still be obsolete compared to the pre or pixi
... Huh?
i don't think english is his first language. if that's the case maybe we can cut him some slack. or maybe it's just typos. i think the beginning of what he wanted to say was it's not a big deal cause Apple and RIMM are down and the market is down. To that i totally disagree. Apple and RIMM are not down 30% over like 5 days.
By the looks of your grammar, I would say English isn't yours either... If you set the standard, I hope you aren't an editor.
I guess I'll have to take that CCC+ rating into consideration when Palm comes to me for a loan.
"in the highly speculative realm"
There's a more common term for that. It's called "junk bond" status. CCC+ is a long way away from investment grade.
Stock value is down, rating is up, it might just be a good time to own some Palm.
Google and Apple don't have AAA credit ratings. In fact, I can't find a rating for either on the S&P website. Neither of these companies appear to have publicly issued debt, so it doesn't make sense for them to pay to be rated by S&P, Moody's, and Fitch.
List of AAA rated companies:
1. Automated Data Processing (NYSE:ADP)
2. Pfizer, Inc (NYSE:PFE)
3. Johnson & Johnson (NYSE:JNJ)
4. ExxonMobil Corporation (NYSE:XOM)
5. Microsoft Corporation (NASDAQ:MSFT)
That's it.
A CCC+ credit rating is highly speculative. Continental Airlines, for example, has a B with a negative outlook (i.e. just a hair better than a CCC+). Considering that airlines have chronic credit issues, it's not a good range to be in.