Palm (PALM) Is A Sell, But Don't Short It--Deutsche Bank

Deutsche still thinks Palm (PALM) is a dog, but they don’t want anyone losing their shirt shorting the stock:

Palm fundamentals remain weak, but short interest is high. Palm is set to report earnings after the close this Thursday. We expect them to print strong unit numbers with weak profitability levels, similar to their results all year. However, we think this is largely reflected in the stock price already.

The company’s top 10 active shareholders hold almost 70% of shares outstanding, while there is a 38% short interest in the stock. As such we strongly caution against holding short positions going into the conference call. Given the limited effective float, in recent weeks, even minor positive news reports have sparked outsize increases for PALM stock.

Deutsche maintains SELL on Palm (PALM), target $4.

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