SUNNYVALE, Calif. (
shares surged 12% shortly after Jim Cramer spoke positively on CNBC of the company and the broader mobile Internet boom.
But some analysts say while Cramer did draw attention to the name, it also became evident to some investors that they needed to clear their short positions ahead of Palm's
Sparking the rally Monday afternoon were reports from trading desks that Palm's stock sale is oversubscribed. This means more shares than the 16 million originally targeted will be needed to fill the demand. The bullishness caused people with short positions to cover their positions. In other words, some traders were now buying the shares they borrowed on the hunch that the stock price would fall.
Written by Scott Moritz in New York