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Palm Shares A Roller Coaster |
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Written by Adam Gosling
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Tuesday, 06 March 2007 |
Investors in smartphone maker, Palm, have had an interesting weekend with
the company's shares first rising 30 percent on takeover rumours before
falling back 6 percent in early Monday trading after analysts painted a
gloomy picture of upcoming results announcements.
Often the subject of takeover recommendations and rumours, Palm perhaps
could be looking for new owners. The New York Times, citing unnamed
sources says the company is on the block, has appointed bankers to
assist with a sale and Nokia is rumoured to have its cheque book out.
Palm's share price has steadily risen through February as sell-off
rumours circulated around Wall Street according to reports, but then in
the past week they really took off charging 11 per cent on Friday alone
when media reports began confirming the story.
The smartphone makers, which is said to have a market capitalisation in
excess of US$1.7 billion is believed to have appointed Morgan Stanley
to help it look for a buyer.
Finance industry insiders have suggested
there are two possible ways forward for Palm. Private equity buyers
have expressed some interest, but as the share price rises this is made
less likely.
An industry buyer Nokia and Motorola have both been rumoured in the
past week is a more likely outcome as they have more potential for
synergy. A final option, floated in the NYT report could see the
company on the acquisition trail itself, buying up technology that
would help it compete with the likes of Nokia, Motorola and RIM.
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