The Spiral in Palm Trading (PALM)

Posted in pre-market 
September 18th, 2009

Palm Inc. (NASDAQ: PALM) beat earnings non-GAAP loss was only -$0.10 EPS.  The company said that non-GAAP adjusted revenues were $360.7 million versus estimates $-0.24 for non-GAAP EPS and $297.7 million in revenues.  This is huge on the surface, but PALM also announced a 16,000,000 share secondary offering.  Shares traded down almost 5% last night and then traded up 5% after the news as well.  The shares ended up going out down 2.9% at $14.01 after closing at $14.44 yesterday, but the after-hours volume was over 11,000,000 shares.  At 8:24 AM EST we have seen 260,000 shares hands, surprisingly low volume, and the stock is down ‘only’ 1.3% at $14.24.  Be advised that this is quadruple-witching options expiration date and the short interest is a whopping 40% of the float.  Palm could trade all over the place all day…. The highs in the recent days are $15.04 and $15.09, while the lows in recent days are $13.41 and $13.46.  Be advised that to throw in another metric, its 50-day moving average at $14.44 and that has acted as a crucial moving average in the stock trading for almost two months.   -JON C. OGG

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