Just two weeks ago, an analyst at Auriga USA encouraged you to run out and buy Sprint stock, thanks in big part to the success of the Palm Pre. Now, another analyst says you should sell your Palm stock because too many people are returning their new phones to the stores, taking a bite out of the company’s bottom line.
Kevin Dede of Jesup & Lamont slapped a “sell” rating on Palm stock today, saying shares are worth only $12.50. They were trading for $15.29 one hour before the close Monday, down 9 cents.
Dede expects a high number of returned smartphones – based on defects – will be reflected in Palm’s next earnings report. He estimates as many as 40 percent of the phones have been returned. However, he admits there isn’t enough confidence or data to turn his comments into an official report.