NEW YORK, Sept 21 (Reuters) - Shares of Palm Inc closed up almost 14 percent on Monday after a late afternoon spike as investors anticipated a successful secondary stock offering, one analyst said.
Avian Securities analyst Matthew Thornton said the stock was likely buoyed by rumors that Palm's recently announced secondary offering would price on Tuesday.
He said that move was likely exaggerated because of the company's high percentage of short-seller investors, which bet on a share price decline but move to cover themselves if they see signs that a stock will rise instead.
'With a high short interest it doesn't take much,' to move Palm shares, Thornton said.
The analyst also cited positive comments about Palm from stock commentator Jim Cramer on CNBC television, suggesting that the market had over-reacted to Palm's quarterly report and guidance issued late last week.
The phone maker is betting a turn-around of the company on its webOS software and its Pre smartphone and another phone known as Pixi. Sprint Nextel has exclusive rights to sell both phones at least initially.
Palm had also said last week that it plans to sell 16 million shares of common stock.
'My guess is they're out doing the roadshow for the common share offering,' Thornton said.
Shares of Palm, which had already quadrupled this year, closed up $1.94 or 13.85 percent at $15.95 on Nasdaq.
(Reporting by Sinead Carew; Editing by Richard Chang) Keywords: PALM/ (email:sinead.carew@thomsonreuters.com; +1 646-223-6186) COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
Avian Securities analyst Matthew Thornton said the stock was likely buoyed by rumors that Palm's recently announced secondary offering would price on Tuesday.
He said that move was likely exaggerated because of the company's high percentage of short-seller investors, which bet on a share price decline but move to cover themselves if they see signs that a stock will rise instead.
'With a high short interest it doesn't take much,' to move Palm shares, Thornton said.
The analyst also cited positive comments about Palm from stock commentator Jim Cramer on CNBC television, suggesting that the market had over-reacted to Palm's quarterly report and guidance issued late last week.
The phone maker is betting a turn-around of the company on its webOS software and its Pre smartphone and another phone known as Pixi. Sprint Nextel has exclusive rights to sell both phones at least initially.
Palm had also said last week that it plans to sell 16 million shares of common stock.
'My guess is they're out doing the roadshow for the common share offering,' Thornton said.
Shares of Palm, which had already quadrupled this year, closed up $1.94 or 13.85 percent at $15.95 on Nasdaq.
(Reporting by Sinead Carew; Editing by Richard Chang) Keywords: PALM/ (email:sinead.carew@thomsonreuters.com; +1 646-223-6186) COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.