Four analysts tracked by Thomson One data now rank the stock at “sell” or “underperform”, and nine others rate the stock at “hold,” reports Reuters. Kaufman Bros’ Shaw Wu was one of the analysts who cut his rating on the shares to “sell” from “hold.” He wrote: “While we believe Palm has some value with its webOS…we are unsure of the company’s prospects as an ongoing concern.”

As we wrote yesterday, the problem is two-fold. First, its Palm Pre and Pixi launch with Verizon Wireless did not go well. Now Palm is left scrambling to unload tons of unsold handsets. With inventory stacking up, revenues in the fourth quarter will be tough, forcing the cash-strapped company to burn through its cash reserves. While Palm will have to cut expenses to stay alive, it doesn’t come at a good time when other competitors, who have much deeper pockets, enter the market or gain momentum.

At this rate, Palm could make an attractive buy-out candidate—something that has already been speculated about extensively. But Palm’s CEO Jon Rubinstein, declined to comment on the likelihood. “There’s all kinds of speculation out there about. That we are going to get bought, that we are not going to get bought, we’re not going to comment on any of those,” he said, according to a Seeking Alpha transcript. “Obviously, we’re a public company. And if there’s a reasonable proposal, of course, the Board has to consider it. But that being said, our focus since the day I arrived here, and that’s almost three years ago now, is to build a great company with a great mobile platform and great products. And that’s been our focus.