This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Palm: Is the M&A Arbitrage Premature?

SUNNYVALE, Calif. ( TheStreet) -- Is a big tech company about to have embattled Palm (PALM) in the palm of its hand?

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.

A Dealmaker's Five Predictions: Forbes

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.

1 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
AAPL $124.25 -0.14%
FB $81.66 -0.67%
GOOG $542.56 -0.99%
TSLA $187.59 -0.63%
YHOO $44.13 -0.69%


DOW 17,698.18 -77.94 -0.44%
S&P 500 2,059.69 -8.20 -0.40%
NASDAQ 4,880.2280 -20.6570 -0.42%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs