HP buys PALM, or WebOS vs. iPhone vs. Android vs. Windows Mobile 7

April 29, 2010

Back before the blog, ANT was bullish on Palm.  No, not in recent months while the shares were falling from their highs down to their dismal lows.  No, these were the heady days in January/February of 2009 right after Rubenstein suprised everyone with his Steve Jobsesque demo of the Pre and WebOS (probably at CES).

At that point the shares were priced for bankruptcy and even after the demo of the product it tooks most analysts months to realize that at the very least Palm had an excellent product that was worth more than $2.00 a share (although some analysts got carried away thinking that Palm would become a real player in mobile again).

ANT made a small investment (again, we don’t have much capital) around $4.50.   The share price ran up and we got a bit nervous (given the big percentage amounts it had already run) and sold it at 17% at $5.30.  This was a judgement error as the shares proceeded to skyrocket (right up to $18.00, if memory serves me).  We here at ANT learned the lesson that the market takes alot longer to absorb new information about product potenial than we do.  Never assume the market is efficient and that all information is priced in to a current share price.  The market is often wrong, if the share price is around $5.00 when the product is demoed, a few months pass with no new information out of the company (on product or financially) and then the shares are $7.50 (a 50% increase), you can be sure that it takes time for information to move to market participants, most investors and analysts don’t process the meaning of new products quickly.

Enough dreaming about trades that could have been (i.e. $4.50 goes into $18.00 4x).  ANT acknowledges its mistakes, even the profitable ones, and lives to fight another.

We will closely monitor HP’s integration efforts and their ability to roll out a suite of WebOS products (phones, netbooks, tablets, maybe even TVs).  The real challenge will be getting developers on  board but that shouldn’t be too hard if HP rolls out a large number of products quickly.

ANT thinks it would be smart for HP open source WebOS, it would create a real Android competitor and increase the odds of building up an ecosystem.  It would leave the highly integrated space to the guys who do it best and take the fight direct to Google.

More analysis to follow on this (i.e. does HP have upside as a smartphone player, big stock but also a big market).

As for now, the day job calls…


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