Report: HP Considering Splitting up Into Smaller Companies

News
By Zak Islam
published

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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Zak Islam
19 Comments Comment from the forums
  • A Bad Day
    HP's board is apparently looking at options to "obtain maximum value for shareholders."

    There's your problem.
    Reply
  • ta152h
    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.
    Reply
  • unksol
    ^ this. And this rumor was discredited weeks ago
    Reply
  • vaughn2k
    The real customers are the SHAREHOLDERS and not consumers, by the way... blood sucking greedy people.
    Reply
  • RealBeast
    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.
    Reply
  • ta152h
    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.
    Reply
  • Kami3k
    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?
    Reply
  • A Bad Day
    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.
    Reply
  • NuclearShadow
    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.
    Reply
  • m32
    Poor WebOS....
    Reply