ThinkEquity: Palm Increasingly Likely to Be Bought Out

The probability that Palm (PALM) will be acquired is increasing, according to Jonathan Hoopes, an analyst at ThinkEquity. In a research note this morning, Hoopes asserted that Motorola’s (MOT) deal to buy Symbol Techologies (SBL) “just increased the likelihood that either Motorola or another major handset vendor will see value in Palm and move to acquire the company.”

Back in February, Hoopes notes, activist investor Mark Nelson, who owns about 8% of the company’s stock, wrote to the board proposing that it seek a strategic buyer.

Hoopes says his belief that either Motorola or another company will pursue the company “is a major reason we did not encourage investors to sell shares despite management’s recent track record of mis-execution.”

Hoopes thinks that the Symbol deal doesn’t address Motorola’s desire to unseat Research in Motion (RIMM). He concludes - though I would say he doesn’t quite explain why he thinks this - that the “chances that Motorola or another major vendor buys Palm have just increased by an order of magnitude.”

Palm shares today rose 64 cents, to $15.61. Hoopes’ price target on the stock is $22.

Comment on this article

Comments

[telemachus:]

I don't like any of the players in the smart phone market. RIM, Palm, and Motorola will all probably face intense competition and reduce margins because of fierce competition.


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Peter Chin
(Freelance blogging on Moneyfingers Blog: Adventures in Personal Finance and Investments
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2006 Sep 20 09:11 PM

[Tom B:]

The PDA market evaporated about 5 years ago; I wouldn't touch Palm.

2006 Sep 21 09:41 AM