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  1.    #1  
    Filed in SEC today.

    Harbinger announces 9.48% passive stake in Palm - MarketWatch

    16 million shares? equating to about $80 million... quite an investment. I am no banker but it does sound like that.
  2. Kedar's Avatar
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    #2  
    what the heck...
    Yeah that does sound like a lot.
  3. #3  
    $80 million is a decent investment. That is not a cure all, but it does prove others believe in Palm to some extent, and they can still get investments. I'm excited.
  4. #4  
    With this investors history....sounds like they can set themselves to buy them out later on ...meaning palm could be bought out
  5. #5  
    I'm not really sure if it is good or bad for Palm and WebOS.
  6. #6  
    It's possible that they could buy Palm out at some future date, but from the article on the front page of P|C, it appears that at least for the time being this is an investment in a company they think is on the cusp of growth and which they think has potential. I am feeling fairly positive about this development, especially since it seems to indicate that, for now, Palm will remain independant and will not be bought. More webOS for us!
    Blaize, Mistress of Verbosity



    Be nice until it's time to not be nice.--Dalton, "Roadhouse"
  7. angiest's Avatar
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    They could, conceivably, think that this will turn into quick profit if a buyout will be announced soon, or as a means of gaining a position in the acquiring company, whoever it is, and depending on how the deal is structured.
  8. Brainerd's Avatar
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    #8  
    I believe they feel that Palm is currently undervalued. If Palm makes a turnaround, they will make a boatload of money on their investment. If Palm is sold or liquidated, they will make a little bit on the sale of Palm's patent portfolio and maybe WebOS.

    Basically, this hedge fund is hedging on Palm making it, but they feel they are covered if Palm fails. Sadly, it doesn't change anything for the time being.
  9. #9  
    This investment was made in the open market. The filing shows they bought just under 10%, which keeps them out of the "insider" classification (lots of requirements there, for those who own over 10% of the outstanding shares).

    This was obviously at least part of the reason for Monday's volume and stock price jump... 16 mil shares for $80mil is about $6/share.. they likely bought large blocks with the huge volume during the day.

    I posted on the front page regarding checking short interest; here is the link to NASDAQ's short interest page for PALM:

    Short Interest - Palm, Inc. (PALM) - NASDAQ.com

    This will be updated Friday, and should be an interesting pattern to see. The short interest has built up significantly since last fall, and peaked in February. If there is a sharp decline in the short interest on Friday, that's one indication of what Wall Street thinks of PALM's future, in light of this investment.

    Remember, these guys are technology guru investors. There was an article about PALM's patent portflio alone being valued at $8 - $9/share. If that's even close to being correct, these guys just validated it with their investment.

    If I were investing, or trading (full disclosure: Im not, currently), I'd see this as further proof that current prices appear to be bottomed out.

    In the end, though, while this IS a vote of confidence for PALM, they just have to execute.

    STILL waiting for my unlocked for US GSM Pre+, thankyou!

    "The more I learn, the more I realize just how little I really do know!" -Albert Einstein

  10. #10  
    STILL waiting for my unlocked for US GSM Pre+, thankyou!
    Your gonna love the Pre if you havent got one already hehe
  11. #11  
    Building on what a couple others have already said, for those not terribly familiar with equity markets, Palm did not actually get any additional capital from this. Harbinger just bought shares from existing shareholders. So, it doesn't immediately help their execution in selling smartphones right now. However, some simple math does lead me to believe that if a merger happens it will be for a fair price and under positive terms for Palm and WebOS. With Elevation owning approximately 30% and Harbinger owning just shy of 10%, anyone interested in purchasing Palm will have to convince between 83 - 84% of the other shareholders to sell (that's without including shares owned by Palm executives and other affiliated parties). I think it would be very hard to get that kind of percentage unless someone stepped in willing to pay a major premium on the current price and nobody's going to do that unless they had big plans for the assets they were acquiring.

    However, what I see being as, or possibly more, likely would be that Harbinger is in discussions with Elevation to take Palm private, infuse the necessary capital, make needed changes and then make a killing with a new IPO a few years from now. This would allow them to focus on execution and not have to deal with the inane and myopic stock analysts.

    Anyway, it's a positive event for Palm. I'll take any of those we can get right now.

    JP
  12. #12  
    True, but millions and millions of shares of pretty much every publicly listed company are bought and sold every day. People sell for lots of reasons. Still, you are correct that probably most people who sold to Harbinger believe Palm's future prospects are pretty dim. However, to my original point, Harbinger just snatched up the easily acquired shares, leaving a much more challenging field for anyone who wants to purchase the company who is not named Elevation, or Harbinger.
  13. #13  
    Gargolypes;

    This is more complicated than you think, so bear with me.

    Yes, you are correct, however, no, not necessarily, unless you consider NASDAQ marketmakers investors..

    A marketmakers job is to provide liquidity to a stock.. especially in heavy volume situations. They ordinarily have thier own avaialable amouns of stock for each company on hand to sell to buyers, but, in situations where demand is too heavy and there isnt any stock left, they can also short the stock to the potential buyer, or, cover a short sale they made by buying a short sale being offered.

    This is why, traditionally, after a spiked heavy volume day, the price drops a little bit.. the Marketmakers are covering thier short sales they made to meet the heavy demand the day before.

    That being said, there were over 60 million shares shorted as of march 30; they were looking to cover (buy back) shares, and when a legitimate demand for 16 million shares came into play, ya think there was some competition for buying?

    The volume for the day was 135 million shares.

    Many of those shares sold, and bought, were day traders and market makers doing thier job... as well as other traders who bought when the stock was lower priced and sold for a profit in the current range.

    "The more I learn, the more I realize just how little I really do know!" -Albert Einstein

  14. #14  
    Don't particularly want to turn this into a finance class, unless people are actually interested in the mechanics of financial markets. I teach accounting and finance at the collegiate level and started my career selling investments (didn't actually like the selling part), so I'm well familiar with how dealer markets work. That said, the marketmakers do just that, make the market, ie keep it sufficiently liquid. So, whatever transactions they make will essentially be to maintain a sufficient inventory to fulfill their obligations. So, while Harbinger may have technically bought from the marketmakers, they will replenish their inventory from people selling the stock and the net result is a good chunk of the people looking to get out of Palm stock at its current price have already done so and roughly 40% of Palm's stock is owned by two major investment groups.

    Gargoyle

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