VisorCentral.com - Handspring Plunge

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VisorCentral.com (http://discussion.visorcentral.com/vcforum/index.php)
- Visor General Chat (http://discussion.visorcentral.com/vcforum/forumdisplay.php?forumid=31)
-- Handspring Plunge (http://discussion.visorcentral.com/vcforum/showthread.php?threadid=17946)

Posted by Toby on 09-06-2001 07:17 PM:

quote:
Originally posted by foo fighter
Difficult to say. Technically it should trend upward from the infusion of cash into the company's coffers. On the other hand it could get hammered the same way HP and Compaq's stocks are receiving from investors, just one day after the merger announcement.

There's no way to know the answer to this without knowing the terms of the hypothetical buyout. A buyout has no 'infusion of cash' (into the company) necessarily tied to it (because the stock the corporation retains may not be what gets bought). The HP/Compaq deal is a good example of this. No cash changed hands in the merger. It was a stock swap.

Posted by Keefer Lucas on 09-06-2001 07:53 PM:

In Theory

quote:
Originally posted by chesswrangler
What happens to Handspring stock if someone else buys them?

In theory a company like Motorola or Apple would make an offer, these days at a small premium, and pay for company owned stock with cash. Ideally this would be accompanied with visionary statments from the highest levels announcing how much money the new buyer anticipates plowing into the company(s).

That kind of announcement could easily double Handspring's already depressed price...(would a buyout of HAND when it was at $15/share double it? No. Could a buyout at $2 double the share price? Yes. Guaranteed? No.)

On the settlement date existing shares of HAND stock would be converted on a fractional basis to the stock of the purchasing company (which may in turn reissue something approximating HAND stock as a tracking issue with a chance later to re-covert back into the tracking issue.)

Posted by runnicle on 09-07-2001 12:03 AM:

As a new owner of Prism and VisorPhone, it is discouraging to see the market punishing both PALM and HAND based on the prospect of future competition from MSFT, CPQ and HPackard, et al. Particularly so when it is (or could quickly become) the type of unfair, monopolistic competition described in tonight's news: http://biz.yahoo.com/rb/010906/busi...hares_dc_1.html
But wait, maybe this type of unfair competition is EXACTLY what HAND and PALM need in order to survive. Paradoxically, being crushed by a cheap-shot, below-the-belt blow from a giant opponent may be the only way that we win this fight, by disqualification (i.e., LAWSUIT).

Posted by foo fighter on 09-07-2001 12:28 AM:

quote:
Originally posted by runnicle
maybe this type of unfair competition is EXACTLY what HAND and PALM need in order to survive....being crushed by a cheap-shot, below-the-belt blow from a giant opponent may be the only way that we win this fight, by disqualification (i.e., LAWSUIT).

Unfair competition...cheap shots...below the belt blow?!? Where are you getting this notion?

Why do you consider PocketPC unfair competition? On the contrary, this is a very level playing field. Just because the Palm platform is losing doesn't mean this is an unfair fight. All's fair in love and war.

__________________
My blog: Pocketfactory

Posted by runnicle on 09-07-2001 01:01 AM:

"Bundling" that is anti-competitive

The Yahoo article linked in my original posting contains the following quotation:
**************************
"CIBC World Market analyst Thomas Sepenzis said the two PC makers could lean on their extensive contacts in the corporate market to extend the market share of their hardware, and by default, the market share of Microsoft's software. ``H-P and Compaq have awesome enterprise contacts,'' he said. ''Chances are they will say 'you buy 16 e-business servers from us and we'll throw in 500 (Compaq) iPAQs or (H-P) Jornadas, and we'll support them for you."
**************************
Giving away Internet Explorer as a freebee in Windows has already gotten MSFT into trouble because the court ruled that it was done for the purpose of eliminating competition, and not for reasons of "advancing innovation." If the above scenario, now just imaginary, were actually to occur then it would clearly constitute an even more obvious instance of "bundling for anti-competitive purposes."

Posted by foo fighter on 09-07-2001 02:38 AM:

Re: "Bundling" that is anti-competitive

quote:
Originally posted by runnicle
**************************
"CIBC World Market analyst Thomas Sepenzis said the two PC makers could lean on their extensive contacts in the corporate market to extend the market share of their hardware, and by default, the market share of Microsoft's software. ``H-P and Compaq have awesome enterprise contacts,'' he said. ''Chances are they will say 'you buy 16 e-business servers from us and we'll throw in 500 (Compaq) iPAQs or (H-P) Jornadas, and we'll support them for you."
**************************

These hypothetical bundling deals would be made by HP and Compaq..not Microsoft. This is no different than Handspring making a bundling deal with IBM or AOL.

__________________
My blog: Pocketfactory

Posted by yardie on 09-07-2001 06:16 AM:

Handspring is fine

As far as I am concerned, Handspring is fine until I see a few convinving articles and news release that say otherwise. I still believe that the Company is in good hands. As far the criticism from Foo Fighter...the original Sony Clie was a big flop....Sony had o come out with something compelling this time. If the new Clie's had flopped as well, I suspect that they would just call it a day and fold like theu did with the EVilla and another device (i forgot its name) these past few weeks.

Posted by runnicle on 09-07-2001 01:54 PM:

Additional documentation of troubles for the Palm family is contained in a major story over on WSJ-online this a.m. http://interactive.wsj.com/articles...16575216708.htm

Posted by Magic_Al on 09-07-2001 03:38 PM:

Re: Re: This ain't no Party. This ain't no Disco

quote:
Originally posted by jsbernstein

IMHO, comparisons to Palm are more palatable, but still not ideal, since Palm generates revenue from licensing the OS as well. Handspring lacks a comparable revenue stream, unless they charge a licensing fee for the Springboard. I don't know if they do or not, but even if they do, I'd guess (based on no research whatsoever) that it's still less revenue than Palm makes off of the OS.

There is no license fee for the Springboard. If there were, then very few companies would have supported it.

Actually it goes deeper than that. Average trading volume is somewhat off. As someone else said, institutional investment is off. That's understandable since many mutual funds require stocks to be sold if they fall below $10 a share (which is generally considered to be penny stock land). At their current share price, they could be delisted from Nasdaq.

But there is plenty of good news about Handspring. Their balance sheet gives them a lot of breathing room. Inventories are still high, but they have managed inventory flow very well. (Flow ratio = 1.24) Finally, they hold no long-term debt and actually had a warchest of over $159M on their 3/31/01 quarterly statement.

The big problem right now is the lack of positive cash flow. They obviously hope to relieve this with sales from the new units that are coming up (Treo, etc.)

They are going to have to generate enthusiasm for their products in order to raise the stock price to the point where institutions are willing to get back in. New products will help, but only good earnings over several quarters will really get the stock price back to recent levels.

--Alan--

Posted by foo fighter on 09-07-2001 03:52 PM:

Re: Re: Re: This ain't no Party. This ain't no Disco

quote:
Originally posted by Magic_Al
They obviously hope to relieve this with sales from the new units that are coming up (Treo, etc.)

I think the Treo devices will flop. They are actually more of a cell phone than a PDA. And right now, cell phone sales are floating at the bottom. Existing Visor users won't buy one because it lacks a springboard slot. Handspring seems to have a serious problem with timing its product releases. Every new product seems to be about 6-12 months behind the market. They released the Edge at a time when high-end monochrome models were clearly in the decline, and now they are going to release these phone/PDA hybrid units at a time when no one is buying cell phones. And knowing Handspring, they will price these new units way too high, probably $399-$499.

__________________
My blog: Pocketfactory

Posted by runnicle on 09-07-2001 05:38 PM:

Forbes article about the competition w/MSFT

Not only the new Pocket PC update from MSFT, but also new Pocket PC devices (e.g., Stinger) are on the horizon. The Palm family has its work cut out for it:
http://www.forbes.com/2001/09/07/09...o&referrer=

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