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  1. Xyg
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       #1  
    http://blogs.barrons.com/techtraderd...ting-earnings/


    Despite being enamored with Palm’s (PALM) Pre smartphone, analyst Kevin Dede with boutique investment banker and brokerage Jesup & Lamont this morning initiated coverage of Palm shares with a “Sell” rating. Dede thinks the shares are worth $12.50.

    Dede thinks Palm’s August-ending Q1 will reflect a high cost for returned units of the Pre owing to a manufacturing defects. Dede bases his analysis on a survey of Pre buyers at an enthusiast Web site, precentral.com. According to that survey, he concludes, 40% of initial Pre sales are returned. In addition, ” Impromptu questioning of managers of local retailers (Sprint (S), Best Buy (BBY) and Radio Shack (RSH)) indicated that about one in three devices is being returned.”

    Dede cautions that “we have neither sufficient confidence nor statistical relevance to bend this data into an official report,” but his point is that the stock trades at 48 times next calendar years’ consensus earnings estimate of 32 cents per share, which he feel does not adequately discount the risk of a high cost for returned Pres.

    Mind you, Dede is modeling a 30-cent loss for the August Q1, higher than the Street consensus of 26 cents, but he has a 45-cent loss for the fiscal year ending next May, which is lower than the average 58-cent loss. In other words, Dede expects Palm to fix some engineering problems that are leading to a high level of returns, he thinks Palm will suffer in the near term.

    Palm shares today are off a penny at $15.35.
    Summary: An analyst from "boutique" investment banker and brokerage Jesup & Lamont conducts entirely unscientific research into return rates of the Palm Pre, issues "Sell" rating for Palm.

    How is this guy still employed? And how can I get a job spouting this kind of nonsense and get paid the big bucks like him?
  2. #2  
    It doesn't suprise me. Everyone I know that has had a Pre has either returned or exchanged it.
  3. #3  
    Well, I can't say I don't agree. There have been many people saying they have returned it at least once for an exchange.
  4. #4  
    Quote Originally Posted by hedwiglives View Post
    It doesn't suprise me. Everyone I know that has had a Pre has either returned or exchanged it.
    So, have you returned/exchanged yours?
  5. #5  
    Quote Originally Posted by GMoney749 View Post
    So, have you returned/exchanged yours?
    Yes. Multiple times.
  6. #6  
    40% return rate is pretty high, that is around 200k so far...I really doubt this is true
  7. Omega33's Avatar
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    #7  
    Quote Originally Posted by hedwiglives View Post
    It doesn't suprise me. Everyone I know that has had a Pre has either returned or exchanged it.
    At first I thought no way could it be near 40% but when i saw your post and thought about for a second everyone i know along with me has had to return/exchange their phone multiple times.

    Still 40% seem really high. I'll take a guess and say when or if we ever find out the real exchange rate for the first few months it will be around 25%.

    I don't really know if thats bad or not for a Gen 1 phone. Are they any numbers for other big phones that have been out longer like the G1,iphone or any of the top tier blackberrys? As far as exchange rates when they first launched.
  8. #8  
    I find 40 percent hard to believe.
  9. #9  
    He's basing it on what he learns from Precentral? That is nuts.

    No matter what the return rate is, there typically will be a deal with the manufacturer that provides for some of that to come back to Palm, depending on the type of defect. LCD problems will be deducted from that supplier's bill, for example.

    I would be shocked by a return rate that high.
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    #10  
    I returned 4 phones myself, and a friend I know irl returned 3 phones. I think 40% sounds about right.
  11. #11  
    Quote Originally Posted by hedwiglives View Post
    Yes. Multiple times.
    Of course.
  12. #12  
    The return rate is probably more than Palm can afford to really have returned. The 40% may not be right but it probably is high and the comments about the stock price are probably correct. Although and significant negativity about the Pre in reports could send the stock tumbling far lower.
  13. #13  
    That sounds about right to me. I returned mine...
  14. Omega33's Avatar
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    #14  
    Quote Originally Posted by meriwether View Post
    He's basing it on what he learns from Precentral? That is nuts.
    Indeed lol.

    I think his Impromptu questioning of managers of local retailers Sprint, Best Buy and Radio Shack indicated that about one in three devices is being returned. probably is a better number than going off a forums numbers.
  15. vnmous1's Avatar
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    #15  
    I'm a numbers geek/analyst/researcher and I'll tell you that even IF the numbers are that high (which I really doubt) the sample from which he got his data (us) is so incredibly skewed that is has zero bearing on reality. Again, he MAY have reached the same numeric conclusion using a random sample of Pre purchasers (again, VERY doubtful) but to have written this...then been quoted...is just incredible. The "study" has no validity.

    bj
  16. Omega33's Avatar
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    #16  
    Also exchanges are not just a 100% lost money correct? I mean don't they fix them and use them to exchange out in the future as a refurb?
  17. #17  
    We will know shortly once palm releases some more information in their next Q.
  18. #18  
    Ive returned mine a couple of time and I would have done it again if i didnt feel bad about going in and nit picking about a few problems...
  19. #19  
    I wouldn't mind a short-term sell off based on these speculative numbers. That way, I could buy some stock cheap and make some money when reality, rather than an analysis of precentral polls, becomes the basis for market decisions.
  20. Jaer57's Avatar
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    #20  
    I think the fact that this "analyst" is referring to a completely unscientific and irrelevant poll (Sprint and Palm would be the only valid source for this information) is the biggest concern here. If anyone takes financial advice from this person, than caveat emptor.
    Current device: Palm Pre
    Former devices: Treo 755p, Treo 650
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