I guess it depends on one's tolerance for and perception of risk in this market: if his entry point is relatively recent and the choppiness of the last several weeks in Q's price has rattled some castanets in the pantalones, then COMS, with its more conservative valuation metrics, might seem appealing. Plus, Palm has been on a kind of a tear, especially with Symbian alliance showing some weakness, with NOK's signing up to use Palm OS (which I thought might have been a bullish indication for Q and the handset sale--i.e., if there are more pdQ handsets in the Q pipeline and NOK were positioning itself in advance of the purchase).
I agree with your earlier assessment on the strength of Q's staying power at or above 400. TA or not, notwithstanding the JWs and Volts, and the Gorilla Gamers, this market is unforgiving when something goes against the grain. As good as the Q story is--and it is very, very good (and we're coming up to that time in the quarter again, thank you Dr. J)--there are so many swirling developments in last mile/wireless/shifting alliances, who knows how high in price and how far HDR/3G/MSM4500s and what else we don't even know yet takes us. The institutions are going to need confirmation in the short term to send us over and above 400 for the near- and mid-term. And here is where we get to the handset story.
One poster said the handset sale is already factored into the price...in part, true, in part not. I don't think a NOK sale is fully factored into the price yet, not with a long-term ASIC deal and a JV to address dual mode GSM/CDMA ASICs and some other forward-looking dollops. On the other hand, if the buyer is a lesser luminary than NOK, and the Street mavens are disappointed shooting from the hip (which they always do), the price could get trashed for a while.
Having said that, my expectations (not my hopes) for NOK are dimming. Dr. J has been saying that Q has preliminary offers on the table ever since the NYC analyst meeting in October. He has repeated the preliminary stuff several times. We are nearing year-end, which was Q's self-imposed target for announcing a deal. I know Dr. J has to be careful re. the plaintiff's bar, but to keep saying preliminary when things are not preliminary can bring a different set of disclosure problems, as when you say, we are not in merger discussions with xxx company and you announce a merger two weeks later. Companies have been sued for that kind of misleading disclosure, too. Certainly, Dr. J may be trying to lever up the pressure on Q's desired suitor to up its ante, but that sounds like you're playing from a weak hand. I don't know, just my gut and I hope I'm wrong, in spades.
Steve |
