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Report: HP Considering Splitting up Into Smaller Companies

By - Source: Quartz | B 19 comments

Share price has dropped by 75 percent in just over two years.

Worldwide leading PC supplier Hewlett-Packard is reportedly considering an option to split up into smaller companies.

HP's board is apparently looking at options to "obtain maximum value for shareholders." Referring to unnamed sources, Quartz reported that said company directors have "discussed the details of a possible breakup scenario" alongside alternative options.

The company's share price has decreased by 75 percent in just over two years, with nearly 30,000 jobs set to be lost by the end of 2014. Shareholders and investors are said to have stressed that they want to see an increased return from their financial contributions. They believe the PC manufacturer is worth "much more" than its recent share price.

In its 10-K filing with the U.S. Securities and Exchange Commission, HP hinted at the possibility of selling certain divisions:

"We also continue to evaluate the potential disposition of assets and businesses that may no longer help us meet our objectives. When we decide to sell assets or a business, we may encounter difficulty in finding buyers or alternative exit strategies on acceptable terms in a timely manner, which could delay the achievement of our strategic objectives. We may also dispose of a business at a price or on terms that are less desirable than we had anticipated."

Former chief executive Leo Apotheker had planned to spin off HP's PC manufacturing arm, but it was rejected by investors – Apotheker subsequently departed. Elsewhere, the company faced an $8.8 billion charge due to its purchase of Autonomy, which had "serious accounting improprieties."

 

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  • 19 Hide
    A Bad Day , February 6, 2013 10:07 PM
    Quote:
    HP's board is apparently looking at options to "obtain maximum value for shareholders."


    There's your problem.
Other Comments
  • 19 Hide
    A Bad Day , February 6, 2013 10:07 PM
    Quote:
    HP's board is apparently looking at options to "obtain maximum value for shareholders."


    There's your problem.
  • 6 Hide
    ta152h , February 6, 2013 10:08 PM
    The title doesn't match the text.

    Selling off non-performing parts of the company is not the same was splitting up into smaller companies, at least not in the common use of that term.

    When real companies feel their stock is undervalued, they buy back the stock to increase stockholder value. Selling off parts of the company that don't make money might not be a bad idea, but fragmenting the company is a bad idea, because if you separate server/printers/PCs, the comfort level of customers who want to buy all from the same company is gone.

    They already went through this and realized it was a mistake, so I doubt anything like that will happen. It's more likely they'll just shed some non-performing parts that aren't critical to their business, or their product portfolio.
  • 0 Hide
    unksol , February 6, 2013 10:20 PM
    ^ this. And this rumor was discredited weeks ago
  • 2 Hide
    vaughn2k , February 6, 2013 10:42 PM
    The real customers are the SHAREHOLDERS and not consumers, by the way... blood sucking greedy people.
  • 8 Hide
    RealBeast , February 6, 2013 11:04 PM
    So HP thought Dell screwed up going private, but everything HP touches turns to s***, they buy it and then write it down or off, and they need to divest a bunch of stuff again.

    Way to go HP!!!!!!!!!!!!!!!!!

    H and P would vomit if they saw the mess that Leo, Meg, Carly and the others have wrought, total clowns.
  • -6 Hide
    ta152h , February 6, 2013 11:05 PM
    vaughn2kThe real customers are the SHAREHOLDERS and not consumers, by the way... blood sucking greedy people.


    A lot of shareholders are people retiring with their 401K, or mutual fund, who need to have money when they retire. Or just every day people who don't want to put money into a bank, because the rate of inflation easily outstrips any interest someone will receive.

    So, anyone who saves money, via stock ownership, or retirement fund, is blood sucking because they are hoping to get a return on their investment.

    Have you ever considered moving to China or North Korea, comrade? Communism is still around, it's just getting hard to find because it doesn't work that well.
  • 3 Hide
    Kami3k , February 6, 2013 11:16 PM
    ta152hA lot of shareholders are people retiring with their 401K, or mutual fund, who need to have money when they retire. Or just every day people who don't want to put money into a bank, because the rate of inflation easily outstrips any interest someone will receive.So, anyone who saves money, via stock ownership, or retirement fund, is blood sucking because they are hoping to get a return on their investment.Have you ever considered moving to China or North Korea, comrade? Communism is still around, it's just getting hard to find because it doesn't work that well.


    Lol, Fox News drone spotted.


    If stockholders are so great how come Dell is going private?
  • 3 Hide
    A Bad Day , February 6, 2013 11:52 PM
    Kami3kLol, Fox News drone spotted.If stockholders are so great how come Dell is going private?


    And how come EA's shareholders and board of directors allowed the current incompetent CEO to stay in his office?

    You know, the CEO that wanted to charge $1 for every magazine/clip of bullets you use, and thinks that would be a bright future for the gaming industry.
  • 2 Hide
    NuclearShadow , February 7, 2013 12:07 AM
    I love how this is happening right after they ran their mouth about Dell. You know the Dell executives are celebrating after hearing this news after that. Quite frankly I am surprised any investors are still aboard the sinking ship.

    ta152hA lot of shareholders are people retiring with their 401K, or mutual fund, who need to have money when they retire. Or just every day people who don't want to put money into a bank, because the rate of inflation easily outstrips any interest someone will receive.So, anyone who saves money, via stock ownership, or retirement fund, is blood sucking because they are hoping to get a return on their investment.Have you ever considered moving to China or North Korea, comrade? Communism is still around, it's just getting hard to find because it doesn't work that well.


    While I do understand your point and do not entirely disagree you are talking about minor share holders who never get any real say. It's the extremely large holders that are the issue when they have unrealistic expectations and demands.
  • 0 Hide
    m32 , February 7, 2013 12:39 AM
    Poor WebOS....
  • 1 Hide
    twelve25 , February 7, 2013 12:55 AM
    I've been a LONG time HP server user at work. I'm not a huge customer, but we do about $150-250K per year with HP hardware and support. Service and quality has gone down big time, especially support response.

    I think they need to stop trying to save money short-term and double-down on solid plans to get back on track. Accept that you aren't going to make money for a few years. That's fine, when you can look at Billions in profits when you get things in order.

    Of course the silly short-term investors demand profits on a yearly basis, which is at odds with a 70 year old company continuing on with slow, real growth in a mature industry.
  • 1 Hide
    Gundam288 , February 7, 2013 1:13 AM
    The only thing that I own from dell that is decent is my very old desktop that has a P3 in it and org. ran on Windows 95. HP has been nothing but nightmares for me.

    Speaking of which, thanks Zak for reminding me to throw out this old HP Deskjet 5940 that has been collecting dust for over 5 years. I keep forgetting to chuck it on trash day.
  • 1 Hide
    greghome , February 7, 2013 3:18 AM
    Maybe Dell can buy out HP, instead of HP "Destroying" Dell's market share now that Michael Dell is Back in Black :p 
  • 0 Hide
    tokencode , February 7, 2013 4:05 AM
    I wouldn't want to be the guy responsible for investigating Automony's finances before the acquisition... $8.8billion is an awfully big mistake to make
  • 1 Hide
    ethanolson , February 7, 2013 4:57 AM
    Three things HP needs to do:
    1) never buy another company again
    2) sell off every division that isn't directly hardware-related
    3) draw and market the clear line between glitzy, cheap consumer crap and solid business-class gear
  • -2 Hide
    ta152h , February 7, 2013 8:44 AM
    Kami3kLol, Fox News drone spotted.If stockholders are so great how come Dell is going private?


    Are you sure your name shouldn't be Commie3k?

    It's easy to complain about stockholders and companies like they are some machines, but that's for losers who simply don't have, and hate everyone that does.

    The reality is different. It's how people save money, and prepare for retirement. Stocks are choppy, but they average 10% a year. You can't put money in a bank, because it loses value. Or buy bonds, since their return isn't great.

    I realize, as a communist, you object to capitalism. Here's the reality, it's not perfect, it's just the best that's available.

    Capitalism is the unequal distribution of wealth, Communism the equal distribution of misery.

    You Communist Pinko Bedwetters who whine about people making money by investing or being industrious should remember that your form of government has failed repeatedly. Grow up, work, take responsibility for your life, and stop whining about other people that do, and make money doing it.

  • 0 Hide
    virtualban , February 7, 2013 9:53 AM
    A Bad DayThere's your problem.

    vaughn2kThe real customers are the SHAREHOLDERS and not consumers, by the way... blood sucking greedy people.


    Smartest comments I read all day!
    Flimsy computers increase profit margins and bring smiles to shareholders when looking at the bottom line. And the brand name loses it's value and things go where they are going.
    Computers are just an example, but I have seen HP quality and dedication dropping on all fronts, making them unreliable for long term support too, not just short term needs.
  • 2 Hide
    digiex , February 7, 2013 11:29 AM
    More CEO the better the company will be? Then in the future they will merge again or sell the nonperforming entity because they realize that they are paying so many CEO's.
  • 0 Hide
    Kami3k , February 8, 2013 4:32 PM
    A Bad DayAnd how come EA's shareholders and board of directors allowed the current incompetent CEO to stay in his office?You know, the CEO that wanted to charge $1 for every magazine/clip of bullets you use, and thinks that would be a bright future for the gaming industry.


    You just proved my point....