Palm Shares Jump on Nokia Takeover Rumours
Published on: 15th Nov 2009
Note -- this news article is more than a year old.
The share price in smartphone manufacturer, Palm jumped by 8 percent on Friday on more rumours of a takeover of the company, this time allegedly by Nokia.
"Palm shares jumped and its call volume surged to 9 times their normal level as more than 80,000 call contracts traded by midday on renewed takeover speculation," Frederic Ruffy, option strategist at WhatsTrading.com, a Web information site, told the Reuters news agency.
There was a flurry of speculation that Nokia was trying to buy the company back in early 2007. At the time, Palm had hired Morgan Stanley to explore its options, as was reported as wanting at least US$20 per share. On Friday, the share price reached US$12.34.
"The same speculation has resurfaced this Friday, one week before November options expiration," he added. "A lot of the activity is in the Palm November call options with some investors opening new positions expecting additional gains while others are closing out positions ahead of next Friday when they go off the board."
Cold water has been poured on the speculation, as any purchase is likely to cost upwards of USD2 billion and if Nokia wanted the assets, it would be cheaper to simply license the OS from Palm.
On the web: Reuters