The stock market hates HP's new strategy

#1

Post by pemulis » Fri, Aug 19, 2011, 3:29 PM UTC

The stock market hates HP's new strategy
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Re: The stock market hates HP's new strategy

#2

Post by j_col » Fri, Aug 19, 2011, 3:46 PM UTC

Not supprising, as on the face of it, it looks like utter madness.

Re: The stock market hates HP's new strategy

#3

Post by RexRollman » Fri, Aug 19, 2011, 4:02 PM UTC

The stock market's reaction is understandable to me. This is a big change in what HP does and it's going to take a long time for this to play out.

Re: The stock market hates HP's new strategy

#4

Post by notatoad » Fri, Aug 19, 2011, 4:05 PM UTC

the market always hates big risky decisions. it isn't any indicator of whether it is a good choice or not.

Re: The stock market hates HP's new strategy

#5

Post by [deleted] » Fri, Aug 19, 2011, 4:08 PM UTC

[deleted]

Re: The stock market hates HP's new strategy

#6

Post by dblock » Fri, Aug 19, 2011, 4:17 PM UTC

Do look at what the rest of the market is doing! So the market doesn't specifically hate HP that much, maybe a couple %.

Re: The stock market hates HP's new strategy

#7

Post by roedog » Fri, Aug 19, 2011, 4:20 PM UTC

dblock wrote: post #6

Do look at what the rest of the market is doing! So the market doesn't specifically hate HP that much, maybe a couple %.

HPQ was down 15% and the DJIA down 0.26%. The gap appears to be widening.

Re: The stock market hates HP's new strategy

#8

Post by wwkeyboard » Fri, Aug 19, 2011, 4:20 PM UTC

Dose the stock market reflect real investors(by 'real' I mean people looking at where the company will be in a few years and planning to hold an investment for that length of time)? I wonder how much of this is an institution selling enough shares to change a metric and trigger a bunch of algorithms.

Re: The stock market hates HP's new strategy

#9

Post by rkalla » Fri, Aug 19, 2011, 4:26 PM UTC

I think a lot of it has to do with how the decision was... presented?

  1. HP tablet sales fail.
  2. HP warns of low earnings, then announces them.
  3. Promise to make announcement only after market closes on the 18th.
  4. Rumors that they are spinning Compaq back out.
  5. Changes mind and makes announcement.
  6. They are buying Autonomy (enterprise/IBM space)
  7. They are shooting the mobile device effort in the face.

That is... a lot of change to suddenly announce, especially given that the Palm/WebOS aqusition[1] not more than a year ago was the big new vision for the company.

They made one product and couldn't sell it[2] and pulled the plug on the entire vision while at the same time announcing a huge corporate shift.

Busy day for HP.

[1] http://www.engadget.com/2010/04/28/hp-buys-palm/

[2] http://allthingsd.com/20110816/ouchpad-best-buy-sitting-on-a...

Re: The stock market hates HP's new strategy

#10

Post by aresant » Fri, Aug 19, 2011, 4:28 PM UTC

Barron's nails it:

a) "decision to cease all webOS devices (including the TouchPad) a mere 48 days after the launch" - Leadership doesn't know what they're doing w/acquisitions.

b) "expensive acquisition of Autonomy" - $10b to jump into a new market via acquisition which we just proved we're not good at.

c) "material layoffs" and "talent drain over the next 12-24 months' - I believe this. Current talent bails. Changing focus means new recruiting, years of training / efficiency building.

As a shareholder, ouch.

via:

http://blogs.barrons.com/techtraderdaily/2011/08/19/hp-drops...