Speculative M&A trading in Palm shares, which began last week, suggests that's the case, and the press has been busy putting rumors in the palm of traders' hands to help drive the frenzied tech sector action.
Shares of Palm, which had been given up for dead, were trading as if a White Knight was on the horizon on Monday, after Bloomberg reported that high-profile tech sector bankers were at work on finding a buyer for Palm. Palm is reportedly working with Goldman Sachs and tech dealmaker Frank Quattrone to find a buyer, and to make the struggling Smartphone maker as attractive as possible to potential acquirers.Last week, the New York Times also reported rumors of potential Palm suitors. Palm shares rose from their nadir under $4 on Tuesday to just above $5 on Friday afternoon. The year-to-date drop in Palm shares before last week's speculative trading began was equal to 60% of Palm's stock value. On Monday, Palm shares had gained close to another $1, or 17%, to just above $6. There were more than 149 million shares of Palm traded on Monday, versus an average daily volume of 31 million shares traded. Last Wednesday and Friday were days of close to 90 million Palm shares being traded. The problem for Palm, of course, is that not enough of that trading is being done via its own line of smartphones. What's more, Palm has given quite a back-handed slap to its investors, who had become accustomed to thinking that the smartphone maker's share value was in their back pocket, so to speak.