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HP Becomes The Cheapest Giant Ever

Mona Rajhans,  BeyondHeadlines

The discontent over Hewlett-Packard Co’s strategic shift has deemed it to become the cheapest technical company in the entire world. This shift has drastically changed the largest computer manufacturer to a potential takeover target.

Hewlett-Packard has lost more than $10 billion in its market value after it announced that it was spinning off its computer unit, buy Autonomy Corp and scrap to put its mobile software on devices, a plan that was running for the past five months. 

According to the data compiled by Bloomberg, the 20 percent plunge drove to the evaluation of Palo Alto, which is the 5 times estimated profit of the California based Hewlett-Packard. This is general is about 70 percent less than the average technology company.

In November, the position of the chief executive officer was taken over by Leo Apothekar. Since then the shareholders of Hewlett-Packard have lost out in the market as the company tumbled down five times and faced the first decline in profits ever since a decade. According to Solaris group LLC, It may now try luring its buyers by trying to break up the shares and acquire the pieces.

Chairman Ray Lane told PC business: “we are spinning it out and that should free shareholder value”. Hewlett-Packard is now busy looking for investors who would wish to hold the stocks for the longer terms.

The purchase was Hewlett-Packard’s largest since the $13 billion acquisition of Electronic Data Systems Corp in 2008 and Apotheker’s biggest since becoming CEO. 

Apotheker, 57, unveiled last week’s overhaul as he cut sales forecasts for the third time. The former SAP AG (SAP) head is pushing to expand in cloud computing and challenge Oracle and International Business Machines Corp (IBM) in more profitable products aimed at companies as consumer demand wanes and Apple Inc lures buyers to its iPad. 

“You can pretty much take a look at the stock price, look at when Hurd exited, and then look at now,” he told media. “It’s pretty straightforward. Something’s not working.” 

 

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