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Though I'm not crazy about Palm (PALM) and would still favor Apple (AAPL) and Nokia (NOK) (and I'm warming to Research in Motion (RIMM) again) for smartphone exposure, I feel there are several reasons to re-look at the bullish thesis on Palm:
 

• Small market cap relative to forward sales (roughly one-times sales).
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• Monster-short interest of 30% of float, which may have grown in recent days/weeks due to concerns about the weak quarter. So a short squeeze alone could be worth a quick $5 to $6.
  
  
• Aside from the panic lows in late 2008, the stock has a long base of support on the weekly chart going back to 2005.
  
  
• Still largely negative analyst coverage and skepticism about the long-term viability of Palm's story.
  
  
• Last but not least is the fact that Goldman is doing the secondary (this alone could get the stock to $20) and my take is they will do a good job of highlighting the potential positives of this story going forward.

The balance sheet isn't a thing of beauty but it's relatively strong with about $211 million in cash against nearly $400 million in long-term debt. Thus, after the secondary, Palm will again have a healthy net cash position.

A move to new highs puts the stock firmly in the no-resistance zone and upside could be stunning.

And I'm not even mentioning the potential interest from much larger players on the acquisition front.

In light of these factors, I added Palm into the after-hours/pre-market weakness.