PALMs future is very BRIGHT, You are right, Yankowski deserves the benefit of the doubt. the Production Management maybe should get the ax, or I'll just give them all some slack, just enough rope, until the Shareholders meeting, then I'll go there myself and maybe even start some resolutions, anyone want to come to a shareholder revolt with me if they fail to perform? But you see that is really my quandry, I truly looked at all these numbers, more so than any ANALyst, and my conclusion is that the 4th Quarter will be much better than they are guiding down, I actually think there is an outside chance that it will be 3 cents, just add up the revenue if ALL INVENTORY IS SOLD out the door at current prices, thats almost 4 cents, but depends of course on the ECONOMIC RECOVERY FROM THE RECESSION, which I think is in progress, certainly there will not be the 8 cents loss, even they can not justify that, even if they pay and accelerate a TOTAL WRITE OFF of all INVENTORY PLUS the costs building and moving to the new HQ in San Diego, so where is the true number?
In any event the price at $20 was discounted and based on 1 cents, they came through and BEAT THE STREET with 2 cents, I know its just their 2 cents worth, but the stock should be on its way to $30 to $40, not down from $15 to $8. So it just means it will go from $8 to $40 or so, faster than thought, as more data comes in. I do not buy this "NO VISIBILITY" on the one hand and then 4th Quarter "visibile" loss on the other. I still think its a SUCKER PUNCH to GET the ANALysts to give a consensus of lower earnings estimates, so that PALM can EASILY BEAT THE STREET AGAIN. Anyway, I am a Buyer anywhere under $20 to maybe $25 all the way to $50 for sure. That's my new HIGHER target from $46, because I just don't buy this sucker punch, that to me, menas there is really smart money out there, all the way back up to its high of $68. When is the only question I have, NOT IF, but ONLY WHEN. Anyway, I agree with what you said:
<CB: I think you need to cut Carl Y some slack here.
First, the "two founders' of Palm left 3Com in 1998, and none of the present Palm management team (except Kessler) were even around at 3Com at that
point, the management was EB and Co. at 3Com, and the present Palm management had nothing to do with Dubinsky and Hawkins leaving. We'll see in
2-3 years whether Palm or Handspring is the better managed company with better prospects.
Second, we have no idea what factors prevented Palm from having the m500/505 in volume production with initial shipments already made by the time of
the 3/19 announcement. Not only are these new models a fairly radical new platform that they've put together in the last year, they've also brought out
two other new models and two upgraded models, as well as the OS4.0 upgrade, all the wireless initiatives, the Palm.net operation, the three acquisitions,
etc. etc., in the year since the IPO. Plus they are hard at work on OS5.0, the new Strongarm hardware platform, the MOT smartphone, the VIIx
replacement, the enterprise push, etc. etc. There was more than a touch of chagrin in Yankowski's voice when he said on the CC that when he came on
board and Palm was spun off three months later, there was an "empty pipeline" of new products and OS upgrades. 3Com was essentially sitting on the
Palm V saying "aren't we smart asses?", without any forward planning for new products in a market that has a product shelf life of 18 months at best.
I don't believe that Carl Y. is such an idiot that he would have a delayed product launch like this if he could prevent it, since he knows it kills his Q4,
normally the best of the year for Palm. Expect some production management "re-alignment" to result from this screw up.
And as for the forward guidance - now what would you have them say? Bruner said that on the current production schedule, Q4 will be back end loaded,
because they can only count on the "initial stocking shipment" of the m500/505 for Q4. TG is probably right that the drop off in Vx orders occurred right
after the 3/19 formal announcement, as retailers and distributors figured they'd clean out Vx inventory over the next month or so, and wait for the new
models to come in. Should Palm management have seen this coming? None of we smart people here did, neither did any of the smart analysts. And even
if Palm did, should they have kept quiet about the launch, squashed the rumors, and put off the announcement until late April/early May or later when the
units will be ready to ship in volume? IMO, Q4 would still have been a problem, and the only thing that could have avoided this would have been having
the units already shipped and ready for launch on 3/19 with the announcement, something that apparently just wasn't doable. So they've said all they can
say right now about the Q4 guidance, and if they'd painted a rosier picture, it would have been based on hope and not the facts in front of them.
So yes, we have a product launch screw up and a short term problem, and yes, management has to take the responsibility for that, whatever the cause.
But with the water under the bridge already, I think we should give them this next Q to see how the actual launch goes before we start yelling for the
guillotine.
JMO, and I'm as pissed as anyone else here. David T. >
And I really agree with your last statement.
I am,
Truly your$,
-Crystal Ball |
