A sell pitch for PALM

On 13th January 2010, I create a stock pitch for PALM recommending a Sell with a target price of $6.50. Please find the 3-page DCF-based pitch here- A Sell pitch for PALM.

Of course, Palm Inc has since been acquired by HP, at an effective stock price of $5.70. I did not consider the potential acquisition in my analysis, and assumed that Palm would continue to compete as a smart phone manufacturer, as opposed to closing down and selling the WebOS to a giant, which is effectively what the acquisition by HP means.

Though I was correct in my call, I still feel very out of depth when it comes to understanding why many analysts had the stock priced at approx. $12.5 — almost double my estimate, when I was writing my pitch.


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