Shares in Palm, Inc. (PALM) peaked shortly after the company’s March 2000 IPO and have declined ever since. There have been some ups and downs of course, but from a high of more than $600/share to yesterday’s close at $5.65, the river has roared virtually non-stop downhill.

And it gets worse today as an analyst from Canaccord Adams has set a new price target for Palm shares. Zero. Nada. Zip. Zilch.

Palm has been struggling for years and while the company’s Pre and Pixi smartphones may be technically equal or superior to those from Research in Motion (RIMM), Motorola (MOT), Nokia (NOK), Apple (APPL), or Google (GOOG), the phones have gotten very little traction in the smartphone space.

Last night Palm reported third quarter 2010 shipments of 960,000 Pre and Pixi smartphones, but sell-through on those shipments was just 408,000. The company also said that it expects fourth quarter revenue of just $150 million, less than half the $306 million that analysts had been expecting.

Can Palm hang on? Canaccord Adams doesn’t think so, saying that Palm’s 12-month supply of cash, an accelerating burn rate, and no prospect of earnings leads him to conclude that there isn’t “any value in the company’s common equity.”

As a viable stand-alone company, Palm’s days might be over. The company needs to raise more capital, and there is unlikely to be a long line of banks or private equity firms ready to meet that request.

There have been rumors of a buyout by Motorola or Nokia or even Microsoft (MSFT) which might want to enter the smartphone market on the cheap to rattle Google’s cage a little more. Even Dell Inc. (DELL) has been suggested as a potential buyer.

But Palm shareholders should not expect much good from any such deal. Any offer for Palm is almost certain to be for less than the company’s share price at the time the offer is made, a so-called ‘takeunder’. Palm’s chairman and CEO apparently downplayed takeover/under suggestions on the company’s conference call yesterday.

It’s hard to see how anything but the arrival of the cavalry will save Palm from annihilation. The company simply does not have the means to survive without a rescuer.

Palm shares are off nearly 20% this morning, after hitting a new 52-week low of $4.55. Volume is already two and half times average daily volume. Makes you wonder who is still holding on to the stock and why.

Tell us what you think here.

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