Remarking on Palm’s gruesome third quarter during an earnings call yesterday, CEO Jon Rubinstein called the company’s performance “extremely disappointing to me personally.” This sentiment seems to be widely held among investors, who are dragging the company’s shares through the mud today–at $4.66, Palm is down 17.52 percent as I write this–and among analysts questioning whether Palm can ever pull off the turnaround for which it’s striving.

Analysts issued a handful of research notes on the company this morning and they are all viciously negative. The headlines proclaim that Palm’s brand value has collapsed, its financial performance is a disaster, and its execution missteps in a business as competitive as the mobile market have left its prospects dubious.

Over at Canaccord Adams, Peter Misek essentially threw in the towel on the company: “We believe that Palm’s troubles will only accelerate as carriers and suppliers increasingly question the company’s solvency and withdraw their support,” he wrote.

“With what appears to us to be roughly 12 months of cash on hand, an accelerating burn rate, a complete lack of earnings visibility, and substantial debt and preferred equity,” Misek added, “we no longer see any value in the company’s common equity. As such, we are reiterating our SELL recommendation and reducing our target to US$0.00 (previously US$4.00).”

Then there was this from Kaufman Bros. analyst Shaw Wu: “While we believe PALM has some value with its webOS and tight integration of hardware and software, we are unsure of the company’s prospects as an ongoing concern.”

And this from Morgan Keegan analyst Tavis McCourt: “It is certainly looking less likely that Palm can execute this turnaround on its own, but the company has at least one more chance with new hardware later this year to try and create some real consumer demand for webOS.”

And finally, this from Needham and Company’s Charlie Wolf: “Palm appears to be in a no-win situation. The company could invest even more in marketing the Pre and Pixi. But it’s unclear whether Palm could ever spend enough to reach a position where Pre and Pixi sales were sufficient to cover its marketing bill and return the company to profitability.”

Wolf concludes that “In the mean time, time is running out. Supported by an increasing number of smartphone manufacturers, the Android juggernaut is continuing to gain steam. And the day when Microsoft (N/R) launches Window Phone 7 and rejoins the spending party is drawing closer.”

If it’s true that bad news begets bad news, Palm is in for a very rough time of it in the months ahead. The company has already lost half its market value since the year began. Time for a takeover? Perhaps, though Rubinstein seems intent on staying the course.

“There’s all kinds of speculation out there that we are going to get bought, that we are not going to get bought,” Rubinstein said on the earnings call Thursday. “We’re not going to comment on any of those. Obviously, we are a public company. And if there’s a reasonable proposal, of course the Board has to consider it. But, that being said, our focus since the day I arrived here, and that’s almost three years ago now, is to build a great company with a great mobile platform and great products. And that has been our focus.”

FURTHER READING:

• Palm Pileup: Weak Smartphone Sales and a Gruesome Q4 Forecast
• Could Be Worse, Could Be Raining: Palm’s AT&T Launch Delayed?
• Could WebOS Licensing Be Palm’s Salvation?
• Palm’s Salvation? Less Push, More Pull.
• And if Palm’s Project JumpStart Doesn’t Work Out, There’s Always “Project Defibrillator”
• Double Face-Palm: Analysts React to Palm’s Lowered Guidance
• Time to Start Looking for a Buyer, Palm?
• 2010: Year of the Palm? Maybe Not…
• Analyst: Palm May Be Acquired in the Next Two Years

Palm lost about half a billion dollars in market value last week after the company warned of a nasty revenue shortfall. And it seems that was only the beginning of what may prove to be a long and painful decline. Investors brutalized Palm (PALM) Thursday, slashing nearly five percent from its share price, dragging it to $5.98 from $6.26.

$5.98 per share. A year ago Palm’s stock was trading at $18.09. Now, analysts like Matthew Thornton at Avian Securities are saying they see it falling to $4–at least in the short term.

Lousy sales of the company’s webOS smartphones have clearly undermined Palm’s efforts to regain its former glory. With the mood on The Street this dark, you’ve got to wonder if anyone believes that’s even possible anymore.

UPDATE: Here’s a bit of good news for Palm. At the Game Developers Conference in San Francisco next week, the company plans to release its webOS Plug-in Development Kit, a set of tools that may spur development or more, and higher quality, third party apps.