Palm shares rise after RBC runs buyout numbers – BusinessWeek
Posted By RichC on April 16, 2010
Shares of Palm Inc. rose Friday after an analyst said the cell phone maker might be worth more then generally thought if it is bought out.
The Sunnyvale, Calif., company’s stock has dwindled from January’s high of $14.17, with even Palm’s latest phones selling poorly. It brought out a completely new operating system, and phones based on it, last year in an attempt to revitalize its portfolio.
Earlier this week, media reports said the company had hired investment banks to look for buyers.
Mike Abramsky at RBC Capital Markets wrote in research report Friday that a buyer might pay as much as $14 per share for Palm, if it really wants Palm’s well-reviewed new operating system, webOS.
“Potential acquirers may look beyond Palm’s struggling hardware business and capital structure … and see a rare opportunity to acquire a modern Smartphone OS, unique R&D team and budding developer ecosystem,” Abramsky wrote.
Shares rose 16 cents, or 3 percent, to $5.56 in afternoon trading.
Top potential buyers, in his view, are Hewlett-Packard Co. and Sony Ericsson. HP has only a modest, business-oriented phone portfolio, based on the aging Windows Mobile system. Sony Ericsson uses three different operating systems right now, none of which are unique to its phones, and might be interested in a chance to differentiate itself and simplify its product lineup, Abramsky wrote.
Other potential acquirers, in Abramsky’s view are Nokia Corp., the world’s largest maker of phones, and HTC Corp., which specializes in smart phones.
