The Smartphone Rally: Palm & The Pre

This depression thing would be much scarier if workers weren’t lining sidewalks to buy smartphones. The mobile hysteria has Palm stock soaring — and talk of a cellular swoon has lit up the StockTwits stream.

stolkers: Jun. 26 at 10:40 AM $PALM screams short, but won’t step in front of the train just yet.Looking back longs will realize this was a fantastic place to unload.
iamned: Jun. 26 at 12:29 PM $PALM is a $4 stock that’s where it’s headed
johnwelshphd: Jun. 29 at9:18 AM @jomariexx I just don’t get $PALM.Won’t be cash flow positive till mid 2010, looks overvalued, maybe a better short in july.
stolkers: Jun. 26 at 10:40 AM $PALM screams short, but won’t step in front of the train just yet.Looking back longs will realize this was a fantastic place to unload.
cfrazierjr: Jun. 26 at1:46 PM @CharlesDelvalle $PALM has a history of snatching defeat out of the hands of victory.
howardlindzon: Jun. 28 at 10:32 PM $palm defying gravity.price and momentum are powerful indicators.http://bit.ly/ProVD

Shares have been defying gravity. Space and time aside, price on momentum plays, and Palm shares are up nearly 400% in six months.

The rally’s fuel is the Palm Pre — the latest blockbuster gadget in a crowded market. CEO Jon Rubenstein wasn’t exactly humble on the earnings call: “The Pre [is] a critical milestone for us and a direct result of the incredible talent at our company. We think the Palm Pre is by far the best product we’ve ever shipped…customer response has been simply great.”

@stolkers begs to differ:

stolkers: Jun. 26 at 12:25 PM $PALM..feeling is that the only reason why the Pre sold is that Sprint has no other “real” options for decent phone.

He’s got a point. The best smartphone offerred by a bad provider is kind of like winning the slow heat at fat camp.

Can Rubenstein pull off a Rudy-like rebound? Palm pioneered PDAs in the 90s and Treo smartphones earlier this decade, but tech history is littered with has-beens. Competition is fierce today, as @KevinDuffey sees it:

KevinDuffey: Jun. 26 at 10:29 AM I don’t think $PALM can outperform over time with the Pre.. too much competition with $AAPL and RIM

Charles Amadeus disagrees. He asserts that Palm could grab market-share from RIM and Apple. He calls the stock a potentially good investment. Charles sees a bull in the tenets of technical analysis.

As Brian Shannon from Alphatrends says, charts don’t lie, people do. The earnings call transcript tells a bullish tale. “There’s room for three to five players to win in this space. We don’t have to beat each other to prosper,” says the top brass.

The charts scream buy. Shorts, whose bluff are you calling — the management, the market, or both?

[Chart posted by Charles Amadeus on his blog.]


The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.

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