""Let's take a look at the chronology here: On February 11, rumors began to circulate that Palm's Chinese manufacturing partner had suspended work on Palm's Pre and Pre-Plus smart phones," Goldman reports. "When asked about this, Palm released a statement saying that because of the Chinese New Year, and because of the new deal with Verizon, the company was ramping up ahead of the holiday, and then would resume manufacturing afterward. Palm also made a passing reference to trying to keep manufacturing in line with customer orders. But it was its casual connection to the Chinese New Year that made a suspension in manufacturing no big deal."

Goldman reports, "So, when did Palm know about that? A source at Palm confirmed to me this morning that the company did in fact know three weeks ago that Verizon and Sprint had halted new orders of the company's phones... Analysts I'm talking to are furious. Management has a serious credibility issue, I'm told, and this only makes it substantially worse."

Goldman writes, "The company seems to be playing fast and furious with the truth. Analysts are wary. And judging by the company's continuing plunge, investors are throwing in the towel. Difficulty competing in the marketplace is one thing; losing trust is quite another."