Silicon Alley Insider has an interesting take on Palm (NASDAQ: PALM) The company has a market cap of $573 million. As of the last earnings report,, the company had $369 million in cash and $259 million in short-term investments. (A reader has correctly pointed out that Palm had a special dividend of $9 after the Q was filed and the company took on $400 million in debt)
Although the news is deeply insulting to Palm's board and management, it may make the company an excellent investment.
Palm runs close to breakeven. In the last quarter, it last $841,000 on $361 million in revenue. The company has brought in the former CFO of Apple (NASDAQ: AAPL), along with one of the executives who helped create the iPod.
With the company's balance sheet and market value being so close together, where is the risk in Palm? The answer is that there probably isn't much.
The ratio also makes the company a better talkover target. The net cost to buy the company is next to nothing.
Douglas A. McIntyre is an editor at 247wallst.com.
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Reader Comments (Page 1 of 1)
12-16-2007 @ 3:37PM
Lee said...
I remember back in the mid-1990's (around 1996), Apple's book value ($3.9B or so) was higher than their Market Cap. Steve Jobs has added $150+ Billion to the market cap and over $12B to the cash/equiv.
Not a bad 10 years.
12-17-2007 @ 3:11AM
Don Nutter said...
Um, they have negative cash after the restructuring dividend
12-17-2007 @ 9:32AM
Eric said...
PALM no longer has this cash. It received $375 mm from Elevation Partners and then paid out around $900 million in a dividend. When they report later this month you will see this reflected in the balance sheet.
12-17-2007 @ 9:34AM
douglas mcintyre said...
Yes. You are right. That occured after the last Q was filed. Thanks for the comment
Doug McIntyre
12-17-2007 @ 12:14PM
just a reader said...
Since the numbers used for this blog entry were incorrect - and now have been updated to show that they were incorrect - why does this incorrect blog still have the same incorrect "conclusion"?