Why consensus was so high remains a mystery as it was clear from the moment the Pre was unveiled that the existing Palm line-up would stop selling. This was likely the last near-term negative catalyst for the stock. Short interest is an unhealthy and dangerous 40% of the outstanding shares. The shares are a bet on the success or failure of the Pre now. The smartphone space is very crowded and while the Pre is the most iPhone-y of the alternatives being offered, it’s certainly not a guaranteed success. People who want an iPhone-like phone should get an iPhone, not a Pre. Despite longer-term concerns, my guess is the move in the stock is higher later as stocks with 40% short interest tend to be covered on weakness and buyers of the stock have been betting on the Pre, not the legacy Palm business.
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- ► 2008 (533)