Contrarian Short Base Rises for Palm

Palm Inc. (PALM) has been one of 2009’s top performers due to the anticipation of the Palm Pre smartphone this month. The share price is up over 28% in the last month, but there is a contrarian view with short base (measured by the Percent Shares Outstanding on Loan) also rising up almost 10% to 17.98% over the same period.

The contrarian view might argue that PALM would be fighting current consumer trends given the popularity of Apple’s (AAPL) iPhone and Research in Motion’s (RIMM) Blackberry. The short bases in the two competitors are considerably lower at 0.74% and 2.14% respectively.

The utilization (which measures the supply and demand in the securities lending market) in PALM is relatively high at 65.81%.

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Comments

[geotopia:]

Palm and Dell - Why the heck is Dell talking about a new device in the midst of what is heating up as intense competition in this market. Dell's got manufacturing and marketing prowess and Palm's got real experience with GUI and small RTOSes, why not work together? Just remember AAPL and RIMM aren't standing still, so together or separately, these two better ramp things up or hang up the towel.

Jul 03 10:27 AM

[JamesApple:]

Palm will thrive upon Rim's demise. 2010-2022

Jul 03 10:28 AM

[TA:]

Shorting is foolish here, the trend is clearly still up till it's not. The coming squeeze will keep fueling it.

Jul 03 02:14 PM

[JamesApple:]

Rim's demise is guaranteed. Rim should be out of business no later than the year 2015.

Jul 03 06:15 PM

[jmmx:]

On Jul 03 02:14 PM TA wrote:

> Shorting is foolish here, the trend is clearly still up till it's
> not. The coming squeeze will keep fueling it.

TA - My thinking on this is that Palm will do ok up until the point that people start thinking that the Pre is not going to make it. Pre absolutely MUST reach a certain level of sales for Palm to be at all viable (barring a buyout) . IF (big if here) the Pre should ever stumble, especially if buyers begin to question the viability of the product, then the whole thing might collapse faster than Lehman Bros. (Lehman who?) In a word, Palm's situation is very precarious.

I think that this is what the shorters are thinking.
-----

BTW - Love the Pre ads. I hate cell phones, but the ads are very alluring, almost make me want to go out and buy one!

Jul 03 06:46 PM

[JamesApple:]

Palm should quickly establish partnerships with American educational institutions, public organizations, legal and medical companies to develop custom applications using hotpoints. Long term projects would ensure Palm steady markets within the US. Palm should solicit American universities to co-develop a BES clone targeted to replace the Rim BES program in the American enterprises. Make this BES clone an open system so that the American enterprises are freed from locked into the old outdated and proprietary Rim products and platform which are email-only, not simplicity. This BES replacement project should last no longer than 15 months because the other competition are apt to jump onto the BES clone market which is quite lucrative as BES is Rim's cash cow. The blackberry phones are insignificant to the American enterprises and frankly, BES is not hard to clone and replace at all.

Jul 03 07:21 PM

[Index_Is_Ha...:]

The Palm Pre is late to a crowded party (RIM & iPhone) and Dell is already working with Google on the next version of the Android. This may not be a smart play for Google but they have $17B in cash and can afford a miss here and there and their entry into the market will come at Palm's expense. Palm is burning cash and already has has $400 million in debt. For Palm to get to scale will probably cost more in marketing dollars than the have.

Jul 04 03:57 PM

[Emankarra:]

The return rate of Palm "the Brie" Pre is very high (around 30%) and competition will eat the margins. This is commodity business in one year (Nokia, etc. drive the prices down).

Palm needs to raise capital to survive, which means that they probably convert the prefered shares to dilute the existing shareholders. I can not really understand why people are so hyped about this (ok, Palm is in Silicon Valley, which is great place - visited once, but still). It's only piece of hardware and software.

Jul 05 08:18 AM

[CGP:]

<<Contrarian Short Base Rises>>
- How does this work in contrast to the short ratio per Yahoo Finance going from 7.0 on 05/01/09 to 3.0 this past Thu. 07/02/09?

<<The return rate of Palm "the Brie" Pre is very high (around 30%)>>
- Can you cite a source?

<< I can not really understand why people are so hyped about this>>
- Is this because you only believe Apple can garner a high level of hype? or do you believe this for any "thing"?

Jul 05 02:09 PM

[lemajrds:]

I can see why... see buglist; wow....
See buglist…Wow
forums.precentral.net/...
1. Light leakage at the bottom of the screen.
2. Dead pixels.
3. When entering data into a form field on a web page, they symbol key doesn’t work (clicking on a symbol does nothing). See bug #70 below.
4. When entering data into a form field on a web page, the cut-and-paste Edit menu items don’t work. (However, the cut-and-paste shortcuts do work.)
5. When web browsing in wide screen mode, if you click on a picture or link that opens up into another card, the new card opens the other way. You have to turn the screen back upright, and then back to wide view for it to flip. Seems like if you are already browsing in wide, new cards would open the same way.
6. Whenever I open or close the slider, the screen fades out and turns black but you can tell it was still lit. It would be like that for a second or two and then turn off. You then had to use the power button to turn it back on. Others are having the same issue (see these links):
forums.precentral.net/...-pr…e-culprit.html
forums.precentral.net/...-pr…hes-phone.html
7. When entering data into a form field in landscape mode, left-right cursor movement and text selection is done by swiping up and down (on the horizontal screen) rather than left and right. In other words, these controls are stuck in what makes sense for portrait mode. (Cursor movement may be the only data entry that makes sense in landscape mode.)
8. When choosing a ringer or alarm sound, and you click on the play button of the built-in sounds, then click on the button in the bottom-left to use an mp3, and click on the play button of the mp3, the built-in sound does not stop and continues to play.
9. Will not allow an IP address to be used when setting up an EAS email account. If the value in the server field does not have a .com or all numbers you can not save the account settings. This also seems to be a bug when setting up an imap account.
10. While in another app a notification comes in of an SMS. I tap the notification to read the sms and the Messaging app is moved to the last card. This may happen with other apps like Email but I’ve only tested with sms. I think cards should stay in the order the user has them arranged.
11. If I create a calendar entry (on the Pre) that is an All Day Event on October 31, 2009 (Halloween) and set it to repeat every year on Oct. 31, the darn thing gets moved to November 1! Same with March 17, 2009 (St. Patrick’s Day). They do stay on their respective dates if the entry is not set to repeat, however.
12. Duplicate of Bug #8 deleted.
13. The alarm I set for 7 am weekdays woke me up right at 7 this morning - but it is Sunday.
14. I put birthdays for my contacts using Google Contacts. When I sync, all changes show up on my phone except for the birthdays. The field in contacts for birthday is left blank, and the birthday will not show up on the calendar either. So this is a definite bug of birthdays not syncing thru google contacts. Also, if you manually type them into the contacts on your phone, it will not sync to the calendar.
15. Noise through the headset jack when using headphones or outputting via the headphone jack to a stereo.
16. Mute Switch doesn’t turn off sound for everything. Music and videos will still play. I understand that this is a feature and not a bug; I’ll leave it here for informational purposes, so people know that it is intentional and that their phone is not defective.
17. When browsing to a link of a PDF on a website, the PDF app does not associate with the PDF URL and give you a “This file type cannot be opened” type error.
18. Enter a “t” in a stored phone number for a pause. This is not a bug. Commas do not work. If you try and redial that number in the phone app by pushing the green phone icon only the main number is dialed, not the rest of the string.
19. I think I found a bug with the facebook contact syncing. First sync works fine, all contacts are fetched. However, if you add a contact to facebook and then tell it to sync again, nothing happens.
20. Added a number to a facebook contact through the messaging program. Found out I added it to the wrong contact, so I deleted the number and added it to the correct contact. Now, when I get a phone call from that number, it has the wrong person’s picture, but the right name.
21. The one time sync with my Centro screwed everything up. Weekly alarms that were set for Thursday were all moved to Wednesday. Birthdays are all gone. Multiple contact entries of the same person. Contacts list wound up with all sorts of names and emails of people I’ve never heard of before (about 100). All of my task folders (15) were eliminated and all tasks wound up on one “unfiled” list (literally hundreds of tasks will have to be manually resorted and filed into the proper folders.
22. While in a phone call, I took the phone away from my ear to tap the screen to end the call. I’ve been able to do this successfully, and the phone recognizes when it has been taken away from your ear by lighting the screen back up to allow you to hit the “buttons” on the screen. This time, however, it started flickering off and on, and I couldn’t hit the hang up button. I was able to exit the phone function using the Center Button to enter the card screen, but the phone call continued until the other person hung up. I tried again and this problem repeated. This looks like it’s a problem that’s unique (so far) to the phone function.
23. Phone freezes if battery is allowed to die.
24. If using espn.com (maybe other websites too) and I have a page open, I will often lock the phone and put it in my pocket. When I pull the phone back out to recheck the score on the already open browser, I CAN’T! If I refresh the page, the browser locks up. I am often forced to close the browser and reopen it.
25. I was paging through the calendar day-by-day and noticed that several were missing…yet each time that I switched to “week view”, I could see an all-day event on the day that I just scrolled by without any events. I’d click the day on the week view and the Pre would switch to the day view and *then* I would see it. If I page day-by-day to the next day that has an all-day event, I have at most a 50% chance of seeing the event on the calendar…but if I screw with switching the “calendars displayed” drop-down list from “all” to something else and then back to “all”, it then shows up. Same thing with switching to week view and drilling back into day view.
26. When connecting to Exchange for mail and calendar, the corporate global address book is synced to my device. That’s about 500 email addresses I don’t need to have in my list, but it looks like the only way to get rid of it is to remove the exchange account, removing the contacts, schedule, and email, no good.
27. The problem I’m having - and I’ve recreadted it on all three of our Pre’s - is that when there is an overlapping event (i.e. two events scheduled at the same time) they show up properly on the weekly view, but on the daily view you might get one or none and the view is grayed out except for a light band at the bottom of the screen.
28. PNG images do not appear to work with the photo app and cannot be used for backgrounds. They are recognized by other apps like the email app, which gives you the option to save a PNG image to your photos but it doesn’t work.
29. When trying to go through contacts, if I go back after opening a contact it takes me to the middle of my contacts in the letter f. The other bug I have been coming accross is when scrolling through contacts it sometimes just goes to a white screen on that card and I have to close it before I can open it again.
30. In Contacts, standard format US numbers format nicely so you can read them. But if you need to enter an extension for someone on a PBX, it smushes the whole thing down into a difficult-to-read string of numbers with no spaces or punctuation. Even If you manually enter dashes, spaces, etc, they get stripped out.
31……

Jul 05 03:52 PM

[jmmx:]

Correction..
In my previous post I said:
"Palm will do ok up until the point that people start thinking that the Pre is not going to make it."

I did NOT mean to suggest that this was an inevitable situation, though I see how it looks like that is what I am saying. My intent was more like "if and when."

My point here is simply that should Pre (and its successors) ever reach a point where it is perceived in the marketplace as anything less than a huge success, then its fall will be precipitous.

Jul 06 09:54 AM