By Ed Oswald | Monday, April 19, 2010 at 1:56 pm
Radio Shack is phasing out Palm phones, putting another nail in what seems to be the coffin for the once powerful smart device manufacturer. The confirmation isn’t coming from “The Shack” directly: instead a Sprint representative confirmed to Barron’s that the retailer was phasing out Palm in favor of other devices.
Sprint spokesperson Scott Sloat said that the move was part of Radio Shack’s normal refresh of it’s cellular phone lines to keep things current. The Shack must now feel that Palm is falling behind — or just plain unpopular among consumers — if it is ready to ditch the brand.
But that’s not all: analysts are now increasingly pointing out that Palm will likely not sell at its current share price (around $5 as of April 19th). This can be interpreted to mean that most don’t have the confidence that the company will have any value to investors (and heck, buyers too), and is poised to fall even more.
Indeed, 17 of 19 analysts polled by Bloomberg said the stock is overvalued, with at least one saying the stock has no value at all. And the longer it takes a buyer to emerge, the more the price of the stock will fall, allowing any buyer to pick up the company on the cheap.
With interest from buyers described as “tepid,” it may be a while before any potential suitor emerges. Then again, some may be waiting for Palm to become a bargain before moving to snatch it up.
Either way, the company probably has only a few months to figure out its next moves. It is believed that the company would have burned through at least half of its cash-on-hand by August, and it wouldn’t be a stretch to think without a buyer, it would be all but out of money by the new year.