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A Second Look at Palm

With Palm shares tumbling over the past 5 days, the desk thought it might be prudent to revisit a call made last week by Canaccord Adams analyst Peter Misek.

As you may remember, in a note to clients he said, “"We believe Palm's troubles will only accelerate as carriers and suppliers increasingly question the company's solvency and withdraw their support."

"With what appears to be roughly 12 months of cash on hand, an accelerating burn rate, a complete lack of earnings visibility, and substantial debt and preferred equity, we no longer see any value in the company's common equity."

Since Misek made that bearish prediction shares have slipped quite a bit.

With the stock around $3.75 is there any reason to step and bet a takeover may be imminent?

Misek says no. "We think any bid will be for $500 million to $750 million. They have $400 million in debt and $300 million in preferred and that leaves nothing for equity holders. We don’t see any reason for an investor to step in."

On Fast Money Misek reiterated that he has a $0 price target on the stock.

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