Pulse Check Update: Could Palm Fetch $14?

Apr.16.10 | About: Palm, Inc. (PALM)

RBC Capital analyst Mike Ambramsky goes out a a limb on Palm Inc. (PALM), suggesting the struggling company could fetch as much as $10-14 a share, twice what most other analysts are predicting.

He believes Palm’s webOS may command a greater ’strategic premium’ than generally appreciated.

“If acquired, webOS may command a healthy strategic premium, given a ‘perfect storm’ of factors:

1) the frenetic ‘land grab’ in the huge, nascent Smartphone market;

2) rising Smartphone competitive intensity, with too many Apple/Google contenders;

3) the realization owning great software is key to leadership; and

4) carrier, OEM fear over Apple/Google’s growing power and threat of repricing down their businesses (Google Voice, iTunes, Nexus, etc.).”

Abramsky sees Hewlett-Packard (NYSE:HPQ) as the best case acquirer for Palm.

In contrast, analysts at Morgan Josephdon’t expect Palm to find a strategic buyer and think the company is basically worthless. They reiterate their “sell” rating with a target of $0.

“Despite speculation that Palm has put itself up for sale, we continue to believe that the likelihood of a strategic buyer emerging is minimal.” Although PALM could receive offers from defensive acquirers “the prospects for the company’s survival look grim.”

Notable Calls adds that some Palm watchers have suggested that Elevation Partners, that controls around 30% has a cost basis of about $5.41 (factoring in the convertible preferred shares).

This post was based on Company Searches of Alacra Pulse for Palm Inc (PALM) and Hewlett Packard (HPQ). See also Pulse Check Update: Palm Reads the Signals and Pulse Check: Palm Readings Don’t Bode Well for PDA Pioneer