Palm Plunges on Downgrade (Update)
Updates stock information
SUNNYVALE, Calif. (
) -- Shares of
Palm
(PALM)
plunged in early trading Wednesday after a Credit Suisse analyst
downgraded
the smartphone maker.
Credit Suisse analyst Deepak Sitaraman warned that Palm's choice of
Sprint
(S) - Get Report
as the exclusive carrier for its new Pixi phone could hinder sales, and he lowered his rating from outperform to neutral.
Palm's stock slipped $1.05, or 7%, to $13.93 recently, despite the firm's
Wednesday. Touted as a cheaper, lighter, version of the popular Pre, the Pixi will be available from Sprint in time for the holidays, although Palm did not announce pricing in its press release.
Palm Pixi |
The phone specialist also lowered the price of its Pre phone to $149.99 with a two-year service agreement and after a $150 instant rebate and $100 mail-in rebate
In separate news, Sprint has confirmed that it will not offer customers a $100 credit to switch to the Pre from another carrier, contrary to a promotion on the company's Web site Tuesday. The offer was slated to run until Oct. 10, but
TheStreet.com
in an email that it was pulled.
The promotion on Sprint's Web site was a glitch caused by an error in Sprint's computer system, the
AP
reported.
Faced with stiff competition from
Apple's
(AAPL) - Get Report
iPhone, Palm is expected to make the Pre available to other carriers, including
Verizon
(VZ) - Get Report
and possibly
AT&T
(T) - Get Report
, next year.
Palm's stock slip ran contrary to the modest rally in tech shares Wednesday, which saw the
Nasdaq
gaining 0.8% recently.
-- Written by James Rogers in New York.
