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Thinking about buying into some of PALM's stock. The release of its new Palm Treo smartphone/PDA is scheduled for next month. The CEO seems to be very confident that this new phone priced around $450, should be a big hit and a great boost to the company's suffering financial data. Not looking at this for the long term, but I believe in the short term it could deliver some quick gains. Anyone have any advice on this one?
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dirtyharry
Aug 20 at 11:24 ET
In the short term you'll lose 25%. In the longer term you'll lose 50% - or not. The fundamentals on this just aren't solid. As far as trusting what any CEO says at face value, forget it. The CEO is the #1 salesman in the company. Just look at GM, C, MER, FNM, and many others.....all have CEOs saying how wonderful things are just before they announce they've lost BILLIONS.
I am not suggesting PALM puts out a bad product or is about to lose more money. I'm just suggesting that right now, at this point, the financials are bad, and from a technical perspective, this is certainly not a buy either. Yes, they've had a good recent run up, but now I'm showing them as oversold. In fact, the whole market might be in for a drop over the next couple of weeks or month.
This can be a wait-and-see stock, but I wouldn't be surprised if this revisits below $6/share within the next 6 weeks. Unless the new phone is an instant big hit, this stock is just a crap shoot with a strong bias to the downside. Not my kind of short-term play. I suggest you find something better for the short term.....and while we're discussing "short" term.... perhaps find something to short...... it may be that time again.
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guliamo
Aug 21 at 5:50 ET
I'm with Harry on this one.
It's hard for me to imagine a potential customer considering an iPhone, Blackberry or Treo.. and picking the Trio for $450... This would have to be one heck of a phone. I think palm's loss of market share is here to stay and the company doesn't have a track record or CEO that can convince me otherwise.
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topgun
Aug 21 at 9:23 ET
Good points. Yeah I thought that might be a little pricey myself considering the competition for it. I'll just keep keep an eye on it for now. Thanks for the responses.