On April 12, Bloomberg News reported that Palm had engaged Goldman Sachs and Frank Quattrone’s Qatalyst Partners to find a buyer. Palm closed at $6.04/share that day. The next morning, I wrote “I’m Betting on a Palm Take Under or Bankruptcy.” Considering the stock has traded as high as $14 this year, a buyout of $6/share or less would qualify as a take under in my book. Needless to say, it wasn’t a very popular position.
The news yesterday shows how desperate the situation is becoming.
- HTC Not Bidding for Palm after Reviewing its Numbers
- Lenovo Emerges as Leader to Buy Palm Inc.
- Don’t Bet on Lenovo Saving Palm
- Who Will Buy Palm? If Not HTC, How About HP?
- Palm’s Back-Up Plan If Its List Of Buy-Out Candidates Shrinks To Zero
Eric Savitz, Barron’s, released an article after the close that will have analysts scrambling over the weekend. He concluded that Palm was worth about $5.09 a share to shareholders after backing out debt and taking into consideration a preferred position of Elevation Partners. That assumes the company was acquired for $1.2B – a number the company’s advisers had been previously seeking (Reuters).
I am becoming more confident in my stance with each passing day. Being right is one thing. Making money while being right is another. The later is the one I care most about. I tweeted the following before the close “$PALM will best its low this week w/o a rescue this weekend. $4.50 sounds about right for Mon…” Let’s see how it plays out.
Palm on Friday closed up 17 cents, or 3.5%, to $5.03.