'Fast Money' Recap: Behind H-P's Deal

The trading panel discussed the reasoning behind H-P's acquisition of Palm.

Author:: David Tong
Publish date:: Apr 28, 2010 8:29 PM EDT

NEW YORK (

TheStreet

) --

Hewlett-Packard

(HPQ) - Get Report

was down in after-hours trading on Wednesday after it announced it was going to pick up

Palm

(PALM)

for $1.2 billion.

At the close of today's trading session, the

Dow Jones Industrial Average

was up 53.28, or 0.48%, to 11,045.27, while the

S&P 500

added 7.65, or 0.65%, to 1,191.36. The

Nasdaq

edged up 0.26, or 0.01%, to 2,471.73.

For a breakout of some stocks from a recent "Fast Money" TV show,check out Dan Fitzpatrick's "3 Stocks I Saw on TV."


3 Stocks I Saw onTV
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Guy Adami said on

CNBC

's "Fast Money" TV show that the deal was chump change for a company the size of H-P. He said investors should take advantage of any weakness in HP and

Research In Motion

(RIMM)

to get into those stocks.

Karen Finerman said HP is a "great buyer" and realized Palm was deterioriating quickly. She said the deal stumped her because she didn't understand why H-P would pick someone which "was last" in the smartphone market.

Gary Kaminsky also said the deal didn't make a lot of sense, but added he respected the judgement of Mark Hurd, H-P's CEO, in making acquisitions.

Jim Goldman, a

CNBC

reporter, said the acquisition will allow H-P to get into the smartphone sector cheaply. He said the deal will give H-P an operating system to run a new crop of mobile devices.

Peter Misek, an analyst with Canaccord Adams, said the deal will provide a sense of relief for Palm shareholders. He said Palm had burned far too much cash too fast, was having problems selling devices and was losing carriers and distributors.

Kaminsky said there were no other buyers for Palm and that the deal would be less expensive and time consuming for H-P to build up that business on its own.

Whitney Tilson, of T2 Partners, said he thought H-P could have wait a year for Palm stock to sink to $1 and save $1 billion.

Melissa Lee, the moderator of the show, noted that

Baidu

(BIDU) - Get Report

was up 13.42% on blowout earnings. Seymour said Baidu's valuatioin is astronomical but it deserves it because it continues to beat the bar every quarter.

Lee brought in David Barger, CEO of

JetBlue

(JBLU) - Get Report

to comment on the consolidation going on in his industry. He said his company remains interested in partnerships such as the one it has with

American Airlines

(AMR)

. He said his company wants to go down that path instead of seeking mergers.

He also said JetBlue is seeing a stronger revenue environment in the first and second quarters.

Shifting to the Greece's debt problems, Peter Boockvar, chief equity strategist for Miller Tabak, discussed the ripple effects from the situation, including the impact of tough austerity packages of the countries that are deeply in debt, the higher costs of borrowing and funding for businesses and the impact of the worsening debt situation on the U.S. and Asia.

Lee noted

Goldman Sachs

(GS) - Get Report

rallied after Tuesday's congressional hearing.

Kaminsky said the smart money such as sovereign funds and hedge funds were probably adding to their positions in Goldman. Anthony Scaramucci said it wouldn't surprise him if Goldman was buying its own stock as well.

Scaramucci thought Sen. Carl Levin (D., Mich.) did a good job in the hearing and that he was glad to hear CEO Lloyd Blankfein say that his company was reviewing its internal practices to make the firm better.

Lee brought in Dennis Gartman to comment on the

Fed

's decision to leave a key interest rate alone. Gartman said the Federal Open Market Committee has no intention of tightening policy for quite sometime. He said that move will drive the long end of the yield curve higher.

Gartman said he would invest in the Canadian dollar and gold.

In the final trades, Seymour liked

Potash

(POT)

. Adami liked Research In Motion, while Finerman liked

Corning

(GLW) - Get Report

and Kaminsky liked Goldman.

-- Written by David Tong in San Francisco

To watch replays of Cramer's video segments, visit the Mad Money page onCNBC

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"'Fast Money'Portfolios of the Week" on Stockpickr every Thursday.