August 17 2009
Rumors of Palm Pre’s death slightly exaggerated
Late last week, analyst Ilya Grozovsky at Morgan Joseph downgraded Palm from “hold” to “sell” because he now estimates that Palm has shipped 50,000 fewer units than he had previously estimated they should have. His note was followed by a similar one from Ashok Kumar at Collins Stewart, who alleges that Palm has cut production of Pres because of weakening demand, and who is also bearish on the smartphone maker. Palm’s stock dipped a bit on the earlier report’s release, but the rest of the market saw the dip as a buying opportunity and rushed back in, driving the stock even higher. Clearly, this was vote of “no confidence”—not in Palm, but in Grozovsky and Kumar.
