Palm’s shares jumped to a two-year high based on rumors that Nokia (NYSE: NOK) may be interested in buying the handset maker, Reuters reports. Neither Nokia or Palm (NSDQ: PALM) commented on the rumors.
It is unclear whether the report is based on actual talks, or based on which company analysts believe would make a good suitor. Beyond Nokia, Reuters also lists Motorola (NYSE: MOT), Dell, Cisco (NSDQ: CSCO) and Hewlett-Packard as potential suitors. Palm’s stock jumped to a high of $17.50 today, gaining nearly 10 percent. The stock run up was likely fueled by takeover talks and word that the company was likely to have a successful secondary stock offering. But Palm also has a lot of short-sellers, who are betting that the stock price will decline.
For Nokia in particular, buying Palm may allow it to gain a foothold in the U.S., where it’s faltered, but it wouldn’t be cheap. Analysts claim Palm could sell for more than $3 billion, even though its annual revenue is less than $1 billion. At that price, Nokia may not be interested. Recently, the company said its strategy was to purchase young, small technology companies rich with talent.
The source of the false rumor that Nokia is going to buy Palm is a Euoropean. press release issued yesterday about Nokia's purchase of Plum Ventures, Inc. That's Plum, P-L-U-M, not Palm! Of course if you are a non-English speaking European Palm and Plum are just two very similar, random sets of characters. That and previous Nokia/Palm rumor started the rumor anew in Finland, home of Nokia. It jumped the bug water without the clarifying press release. Palm stock shot up when the rumor began circulating stateside and now hovers above $17.00 a share. English version of release: http://media-newswire.com/release_1099224.html
Stephen,
You are right. Nokia bought Plum, but it's almost been two weeks since that acquisition. You believe they are related? I think it's more wishful thinking on behalf of investors and analysts in the space. FYI: Here's our Plum story: http://paidcontent.org/article/419-nokia-buys-plum-social-network-service/.
Tricia
This would be an interesting play for Nokia as it would put them right on par to Apple with web OS. The question is if they are ready to drop Symbian? This could be a move similar to Apple buying Next OS and look what happened!
Okay right idea wrong company. As it looks now IMO Dell is toast. Nokia could have hedged their bets….