Shares of Palm stock up 24% in early trading 37
by Derek Kessler
Thu, 29 Apr 2010 10:10 am EDT
Thu, 29 Apr 2010 10:10 am EDT 
HP’s offer for Palm was for $5.70 a share, a hefty premium over yesterday’s closing price of $4.63. Understandably, when the news of HP’s purchase broke, both the volume and price of Palm’s stock skyrocketed, with Palm stock opening the day up nearly 24% from yesterday afternoon. Right now shares of Palm are trading around $5.74 (yes, higher than HP's offer), with investors hedging that somebody else is going to come in and place a higher bid for Palm than HP’s $1.2 billion package. We wouldn’t count on it, and we’re not sure we could take the excitement either. Chart after the break.
37 Comments
It is only over the $5.70 price due to short covering. There was a huge short interest in the stock and those people have to buy to cover their shares.
No other bidders, no higher price. Just short covering.
In after hours trading it was $5.91 at one point yesterday evening. Although I didn't watch it a lot.
What's happening in the next days to Palm's shares? Will they be freezed?
And what about the Palm's stockholders? Will they be paid by cash or by HP's stocks? And when?
Cash, $5.70 a share, presumably at closing on July 31.
Even if someone does come along and want to buy Palm for more money I think this merger is complete...although not official until July. Still, I think both HP and Palm are (and maybe have been for the past few months) committed at helping spread webOS in a more efficient manner. We are all excited about this and there's many reasons to be.
+ Palm team stays intact...at least for the time being.
+ New products have already been mentioned (though vaguely) by both HP and Palm.
+ ...most importantly - webOS lives on =]
...so where are all those EVO jumpers now?!?
"...the world's very first Palm webOS powered 4G HP smartphone!"
Damn sounds weird at first...but after saying it a few times I think it flows nicely. I really hope Palm's name and team stay in tact...but it's all up in the air until July.
I don't know about anyone else, but I'm getting this funny feeling in my gut that the C40 may be a slate/tablet rather than a smartphone. It would be sweet...but only if a smartphone was also released. Am I alone with this assessment?!?
ps. Does Sprint even sell HP phones?!?
"Does Sprint even sell HP phones?!?"
The do now!
Palm Pre and Palm Pixi are Palm devices, not HP ones. Seriously speaking, does Sprint carry HP devices?!? It would be interesting if they don't especially for future devices...notibly those that are branded "HP" rather than Palm.
And to the comment about C40 being a smartphone for sure - who are these reliable resources you speak of?!?
i don't think it is clear that the Palm brand will be retained. I'm not a Palm buff so it I can see the benefits. the name only goes so far, does poor in europe from what i read and it may be worth it to use the hp name to refresh the stuff. maybe give it a fresh start. hell at least they aren't like philip morris and having to fight a name associated with the death of hundreds of thousands of people. personally i think they should also consider a better name then WebOS but maybe it already has a good enough rep. Sure someone at HP is weighing those issues.
HP's Glisten is GSM and is on AT&T.
I don't think that anyone is going to offer a better deal than HP. First, this is all cash so it's going to take a company with more than $1.2 Billion in cash to come along. If they do, HP can counter with either more cash or cash and stock to make their offer greater than anyone others. If stock is part of the deal whose stock would you want at the end of this - HP's or HTC?
I think c40 is a smartphone. Reliable sources have already stated that palm has a better smartphone device with bigger screen coming for sprint. With the line up of other 4g phones
I sure hope so!!!
And I hope that HP is as warm towards homebrew & tweaking webOS as Palm has always been... :-/
FYI.. heard on Jim Cramer/Mad Money yesterday:
"HP wants Palm for many reasons, one of which is that HP has to Pay MicroSoft $85 for each copy of windows it runs on its devices, so if they can replace Microsoft in many devices the savings is hugh for HP! and at $1.2 bil price tag, that can be saved in about one year, not to mention the profits from new device sales at HP." (1.2 bil/85 = 14.1 mil devices). Hp Ships 3.5 million devices per second in 2008, 50 million anually... so do the math..
So HP not so dumb in the valuing of PALM, not to mention the value of the Palm Patents... HP has the deep pocktes to take on Apple and others for Patent infrignment?
So per Jim Cramer... BUY HP NOW.. their cost structure jut imporved by a hugh amount..
Cramer is right from a financial only standpoint. But I don't think that this was decided wholly on that basis. HP was heading in the right direction with their Smart Touch desktops but a lot of that innovation was lost on the public because of price but also because HP could not make it a better product due to the fact that they don't control Windows. Had they been able to control the OS it's likely that the product would have been far more compelling and used more throughout their lineup to create a differentiation. HP did this to create a competitive advantage and to grow into new markets plain and simple. Not having to pay Gates for the OS is simply a benefit but one that's not lost on someone fiscally astute like Mark Hurd.
yeah i heard that. i'm not 100% sure they want to get out from under microsoft. so far they say they'll still make microsoft phones. and i'm not sure it's a zero sum game just yet. they could theoretically sell both. i think they are hedging their bets.
i will say this if it makes since from a balance sheet standpoint the future would be more profitable and HP would be undervalued.
one other thing Cramer is a stock picker not a picker he's not there to say this product is good or bad. And like him or not he's been right on his buy and sell calls on palm. Even last week i heard him say that Palm was something you guy if you are willing to use it as a speculative stock on the chance that it will get bought. he has a whole section that encourages such speculation. He didn't say people shouldn't buy it (i'm not saying you did). And when the buy out rumors happened he immediately when form a don't buy palm to a possibly take a shot on the chance it will bounce.
personally i think the guy gets a bad rap cause he's boisterous and not perfect and here because he's said "sell palm" when people confuse selling a bad company for saying palm pre's suck. Which he's not really doing. He's said don't buy Rimm recently.
Well doesn't really matter who does or doesn't sell HP Phones... Since according to the horses mouth Palm is going to be a business division in the company... Which I hope means they will run as autonomous as possible.
I'm still gonna jump to EVO this summer; video chat, 8 megapixel, collosal screen, Droid apps, Google Nav, WORKING Google Voice App and 4G {with 4G hotspot}: like Quagmire says "Oooh Yeahhh!"!!!
Besides, I expect "...the world's very first Palm webOS powered 4G HP smartphone!" won't be available until I'm due for another upgrade after EVO. Like was posted, that's assuming HP & Sprint sleep together (though I can't imagine why they wouldn't; it's not like HP is Apple and all.. In Apple's dreams!).. :-)
Yes, I'm a fair weather user: I go where my geekness can shine!!
Congrats Palm!
Who cares about the EVO.
All those features are available on all superphones. Take a look at the Dell Lightning, yeah that EVO, not so special anymore and it's not even out yet and already bested.
Umm everyone cares about the Evo.
"All those features are available on all superphones."
Okay.. Does the Palm Pre have those features?
I'm just saying. HP and Palm better whip up something good.
Congrats either way to Palm. One step farther.
I don't care about the EVO ... yet. Since 4G is only in 12-18 cities currently (and mine is not one of them) my "caring" about he EVO will start when 4G is available where I spend 98% of my time. By then HPalm may well have a 4G phone as well.
Sprint currently has 4G in about 45 cities, though most are in Texas & Washington. Here is a link to the cities w/coverage.
http://now.sprint.com/nownetwork/4G/?id9=SEM_Google_P_4G
How about I meet you half way? 14 of the cities listed at that link say "will have 4G in the future" so 31 currently. Still, none of them are where I live (40th most populous city in the US, Omaha NE).
Wow you're like the only Evo jumper that doesn't seem like a douche =) I'm glad you leave webOS w/o complaining about this or that. You go where your geekness shines...nice line. I hope you hop on back over when webOS blows 4G wide open =)
ps. I'm thinking the new webOS 4G device will be released b4 the year is up...thats MHO =) One can only hope right...
Thanks for the kudos.. Yes, there are REAL douches here.
I expect I'll be back (wow, I haven't even left yet) :-)
HP/Palm have the ONLY true OS that can compete with and surpass eyefone's capabilities. I'm very excited and can't wait to see the fruits of this new marraige..
In the mean time, I wanna PLAY! LOL
EVO - summer 2010
LOL @ The EVO jumpers.
Man you must feel pretty stupid right now.
Enjoy your fragmented Android, half-assed smartphone experience.
The rest of us believed in Palm and are being rewarded for sticking around.
EVO still has some impressive hardware on it - HD video, WiFi for 8, etc. That's going to appeal to some folks even if the OS is Android.
Its hardware will be the average a few weeks after release, but it will ALWAYs be an Android.
I think people just don't get it! There will never be a premier Android device! Just look at the Nexus One, cut by Verizon before it even made it out of it's 90 day exclusivity with T-Mobile!
Why? It's already outdated!
When all your competition has to do is manufacture hardware with the latest components, or can afford to provide better components at the same price, it is impossible for you to create a true heavyweight product!
That's why PC's have model names like PSC2020 and Apple has the iMac!
Android is to manufacturers what the Beanie Baby craze was to my mom, a quick & easy way to make a buck! Mark my words; at the end of the day there will be alot of manufacturers stuck with garbage bags full of worthless shit!
And alot of users pissed off that they can no longer get accessories, tech support, or the latest features Google has to offer due to outdated hardware.
If you're a tech enthusiast align yourself with a software platform, not a piece of hardware, and enjoy the ride! Otherwise you'll spend the rest of your existence in misery!
"Do you here that? That's the sound of high heels walking past your front door!"
Good luck with the EVO!
Hope you bought it for Froyo and not it's Sci-Fi hardware specs!
interesting argument but considering android's growth in marketshare i don't expect it to go away not to mention the fact that google is an ad compnay not a phone maker so all android has to do is be free and provide a way for them to deliver ad revenue to mobile devices. And if it's software you think people should be clinging too, seems that given it's penetration android has at least satisfied some customers. more then webos today based on marketshare. So people even if people are picking a software there's not guarantee that people won't pick android. to date they've done it.
REWARDED?? What, do you think Palm (I mean HP) is gonna give a gold star for not trying other devices? I'm not THAT loyal to my car maker, and it carries my children!
I've carried several Blackberry's, WinMo's, a few Treos, a Nextel or 2. My Favorite is Blackberry, but WebOS has been fun and frustrating and I expected that as an early adapter.
I have no problem with your loyalty; God bless you, but there is no need to be so sanctimonious (and rude) about a PHONE. You have your opinion, I'm entitled to mine. Geez.
I actually used Android yesterday in the Verizon store and was throughly impressed. The EVO isn't out yet so NOBODY has left a Palm for EVO yet.
What are you being rewarded with? Did you get a check in the mail? Do you all of a sudden have a 1Ghz phone that records, in HD, has an 8 megapixel camera, hdmi, sd card input, 4G, and an a 30000 app app store with mainstream companies making apps for you? Maybe you will someday. And maybe this purchase will speed up the release of a new version. And maybe HP will mean you'll see 6 or 7 webos phones on several carriers rather then two. But RIGHT NOW there's the same old Palm Pre. You don't have anything today that you didn't have yesterday.
And there's nothing preventing people who change phones from switching back if HP offers a compelling product.
Sooo, what am I supposed to do with my current stock, bought it at 5.11 and supposedly it will automatically sell at 5.7 no matter what. Should I just sell it now that it is 5.77, .07 higher than the inevitable? I'm a stock market noob.
Sell it now. it will take a while for it to close and you are gaining the extra 1% while its trading higher than the price.
Sell now. If the deal is good, its not likely to go any higher. If the deal goes bad...5.70 will seam like a lot of money.
The BID price is $5.70/share sale price, and that is what people are willing to PAY (buy) for the stock. That doesn't mean that that is what the stock is being sold at.
If you bought at lower prices, you can sell for $5.70 (the bid), but not for long... eventually, the short sellers (who are trying to cover thier short sales by buying back, and are the ones likely bying at $5.74) will run out and the arbitragers will move in, and you will be able to buy it at a small discount to the sale price, if you are really pateint and a good trader, but, why? You arent getting stock in HP for your PALM shares, you get $5.70/share..
:)
Don't believe so. You won't be getting HP stock for your palm shares since it is a cash deal. HP will be paying your 5.70 for your palm stock once the deal is closed/finalized.
so if you are able to sell higher than that now, it is worth it since at the end you will only get 5.70 anyways.
That is my understanding at least.
HP computers with Touchstone/bluetooth built-in. HP printers with touchstone/bluetooth printing.