Palm Shares Fall 12% After Supplier Says It's Short of Parts
9/27/00 4:16:00 PM
Source: Bloomberg News
URL: cnetinvestor.com
Santa Clara, California, Sept. 27 (Bloomberg) -- Palm Inc. shares fell 12 percent, their biggest decline in more than two months, after a supplier to the No. 1 maker of electronic organizers said it's experiencing a parts shortage.
Palm's shares fell 6.63 to 48.88 today on the Nasdaq Stock Market. Before today's drop, the shares had gained 46 percent since Palm's initial public offering in March, when the company was spun off from 3Com Corp.
Manufacturers' Services Ltd., which makes handheld organizers for Palm, said yesterday its third-quarter profit will miss expectations because of components shortages and a weak euro. Its shares fell 19.25, or 62 percent, to 11.94 today on the New York Stock Exchange.
''These guys are one of the two contract manufacturers, the other being Flextronics (International Ltd.), that Palm uses to assemble its devices,'' said James Faucette, an analyst at Pacific Crest Securities in Portland, Oregon.
''If they don't make enough Palm Pilots, and can't meet their earnings, then Palm can't meet theirs,'' said Faucette, who rates Palm shares a ''strong buy.''
Bob Blair, an investor-relations consultant to Santa Clara, California-based Palm, said he doesn't believe the Manufacturers' Services announcement was the reason for the drop.
''We've been talking about components constraints since early spring. So that's already in there in people being aware of that,'' he said. He attributed Palm's stock-price drop to investors selling shares after their recent surge. |
