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To: American Spirit who wrote (51834)	5/31/2001 12:13:23 PM
From: American Spirit	Respond to of 57584

PALM again. This new coverage estimate is very conservative considering recent $10 price and probable takeover talks. In any case a bargain right here. Palm Inc (PALM) 5.79 +0.09: Robert W. Baird initiates coverage with a MARKET PERFORM rating and price target of $8; firm is long-term positive on Palm, but is cautious in near term as high inventory and weak pricing are having a negative impact on the industry; also has concern over Palm's weakening cash position; sees Palm's recent $300 mln inventory write-down as a positive in clearing excess inventory; however, continues to estimate that the consumer channel contains over three months of inventory; given the likelihood of continued pricing pressure and soft demand, firm recommends holding Palm.

To: American Spirit who wrote (51834)	5/31/2001 1:55:32 PM
From: maverick61	Read Replies (1) \| Respond to of 57584

AS, all that time away and you still didn't learn to read a balance sheet. Defend Palm and LU all you want, Michael is dead on - both are facing significant cash flow problems. On Palm - read this: thestreet.com and make sure you don't miss the paragraph that says "Palm is now approaching, in a quarter or two, a cash crisis. Uncharacteristically, Palm CFO Judy Bruner wouldn't talk about the company's cash position in last week's conference call. Analysts differ in their assessment of just how soon the cash crunch will hit, but my guess is that within two quarters, Palm is going to have to find more cash to keep operating ... and it might be sooner. Although the stock is trading at $6.65 Tuesday, up from Friday's disastrous close at $5.05, raising more capital through a secondary offering would be very difficult. And the private equity and bond markets are also unlikely to want to play. " Or read this: thestreet.com and in particular this section "Palm had $596 million on hand at the end of the third quarter, but analysts such as Robertson Stephens' Eric Rothdeutsch estimate the company is going to spend more than half of that in this fourth quarter -- Rothdeutsch pegs the cash burn at $350 million. (He rates Palm long-term attractive and his company has done underwriting for Palm.) Palm probably will need to get out of a $460 million deal to build a corporate campus in San Jose, Calif., for liquidity. Bruner detailed that in that case, Societe Generale Financial keeps the $238 million in collateral Palm already has posted and Palm gets the land. Palm will have to sell the land to recoup that cash, presumably in a better market than the current dour Silicon Valley downturn. In the meantime, "It certainly is an acquisition candidate now more than ever," in Sepenzis' opinion. He rates Palm a buy and his firm has done no banking for it. On Thursday afternoon's conference call with analysts, many were throwing around November as the likely time frame for Palm to run out of money. Bruner would not agree, but said Palm may have to seek funding. "Ninety percent of Palm's problems are self-inflicted," says Needham analyst Charlie Wolf, who hasn't done banking for Palm. "In terms of a product transition, I have never seen a worse one in the business." " Hmmmm, lousy management, running out of cash in 3 to 5 months, makes me want to go out and buy them . . . NOT now, lets look at LU - even worse management if you can believe that. They are getting desperate - trying to sell themselves at no premium to ALA - but backed out when top management couldn't save face (and their own asses) by arguing over what to call it - a merger of equals - NOT or a buyout. Now they are back to peddling their fiber division to raise cash - in a worldwide fiber downturn. hmmm, that should get them a lot of cash. And lets look at their 3/31/01 10-Q: sec.gov here is a company barely breaking even at the GROSS MARGIN line - let alone the BOTTOM line !!! A terrible current ratio. losses of over $3B in the quarter - with little cash on hand comparatively. They have $2.3B debt DUE THIS YEAR - with only $1.4B in the bank. Lets assume they collect all their A/R (unlikely given some of the deals they made to weak CLECs ) and they have another quarter similiar to the last - which would taake care of selling alll theri inventory on hand - at a net bottom line loss of over $3B. lets see: 1.4 in the bank 6.0 of A/r we'll assume they collect --- 7.4 (3.0) loss in 6/30/01 quarter (2.0) of accounts payable due (1.3) of accrued payroll , etc due (2.3) of debt due ---- (1.2)B cash shortfall by June 30 without selling anything On the brink of bankruptcy if they don't sell more pieces of themselves - DEFINITIELY. I said it before - and will say it again, do yourself a favor and learn how to read a financial statement