Hewlett-Packard (HPQ)

[iam802]

guess, the new CEO recognize that they can't do more cost-cutting in the long run....there's only so much you can squeeze.

[iam802]

Barclays Flexes Its Muscle in Hewlett-Packard Deal

http://blogs.wsj.com/deals/2011/08/18/b ... od=WSJBlog

Hewlett-Packard’s $10 billion proposed acquisition of U.K. software company Autonomy comes with a lonely number attached: One.

That’s how many banks — just Barclays Capital — are providing financing for H-P’s big deal.

We assume, but we don’t know for sure, that Barclays will syndicate the loan to other banks. Of course, if it has trouble spreading the financing around, presumably Barclays could be left holding the bag on the entire value of the loan to H-P.

But the single-party financing seems to be a sign of confidence that credit markets will hold up, and that Barclays’ balance sheet can support the load.

With a couple of big deals this year, the traditional bulge-bracket banks are proving why they exist in the first place.

Remember that J.P. Morgan committed to an eye-popping $20 billion loan for AT&T’s proposed $39 billion purchase of cell-phone carrier T-Mobile USA. It was J.P. Morgan’s largest-ever financing for a single deal, part of J.P. Morgan’s blessing and burden for advising AT&T on the biggest acquisition of the year (so far).

It’ll be interesting to learn if companies are pressing banks to take on bigger loan commitments for deals, in the wake of the AT&T-J.P. Morgan precedent.

Notably, Barclays and Perella Weinberg are the only advisers for H-P in the Autonomy acquisition. Typically, when a deal requires a load of financing, an acquiring company will pack its adviser ranks with plenty of banks that can pull together financing arrangements for the deal. In H-P’s case, it’s keeping it simple.

On the other side, Autonomy’s adviser ranks list seemingly every bank on Wall Street, in what appears to be a land grab for deal credit.

[winston]

Do u understand what they are trying to do ?

HP shares plunge 20 percent on Wall Street by Germain Moyon

Hewlett-Packard shares plunged 20 percent on Wall Street after the world's top personal computer maker announced a dramatic strategic shakeup that includes spinning off its PC business.

Shares in HP lost 20.03 percent Friday to close at $23.60, wiping more than $12 billion off the Palo Alto, California-based firm's market capitalization.

HP shares, which shed 5.99 percent on Thursday, are trading at their lowest levels in six years.

HP announced Thursday it was exploring a spinoff of its PC unit, or Personal Systems Group (PSG), and buying British enterprise software company Autonomy for $10.24 billion as it refocuses on software and technology solutions.

In a further move away from the consumer space, HP said that it was stopping production of its TouchPad tablet computer, its rival to Apple's iPad that was introduced just seven weeks ago, and phones based on the webOS mobile operating system acquired from Palm last year for $1.2 billion.

http://www.newsmeat.com/news/meat.php?a ... &buid=3281

[iam802]

I think they want to jump into the bandwagon of selling 'patents'.

Very easy way to meet KPI

[kennynah]

i think it is a very tough but good decision... they shd have come to their senses a few years earlier...that their PC business was going no where..

i better check around to see if people i know in PSG in sgp office are getting retrenched,,,,

[iam802]

Key points:
- at lower price, HPQ is able to clear their stock of tablets
- it highlights the 'elastic' demand for for tablets at various price points
- this puts pricing pressure on other tablets makers (RIMM comes to mind)
- it is very easy for companies like Huawei to enter the market with a $150 tablet (remember their $80 Andrioid phone for Kenya??)


====
Lines Form for $99 TouchPad, Now Sold Out

http://www.osnews.com/story/25090/Lines ... w_Sold_Out

Last week, HP killed its webOS devices unit. Over the weekend, the company slashed the prices on the TouchPad. The result? The TouchPad sold out completely in a matter of hours. This confirms what I've been hearing from friends and family: "I'd love a tablet, but I'm not paying laptop money for one."
So, HP pretty much killed its webOS business last week, while the company is also seeking to get rid of its PC business. The additional purchase of Autonomy illustrates that the company wants to get ouf the consumer business, and focus on the enterprise, big-iron market instead. You know, the route IBM took years ago.

To get rid of existing TouchPad stock, the company slashed its price to a mere $99, which is an absolute steal. Suddenly, people are lining up to buy a defunct device with little to no future. There are actual lines at Best Buy for the $99 TouchPad, but Best Buy has already sold out. HP.com, too, doesn't have any on offer.

This confirms a general sentiment I've been hearing around me. Friends and family are all very interested in tablets for use on the couch, but almost everyone I talk to simply finds them too expensive. The iPad 2 and similar tablets like the Galaxy Tab 10.1 all cost round and about $500/€500, which, for most people, is laptop territory, or at least near-laptop territory. That's a huge amount of money for a device which is decidedly less useful and functional than a laptop, and is, in essence, nothing more than a web browser and email client with a large screen.

When it comes to smartphones, which sit in the same price category, things are different, since they are generally "free" on contract, meaning they are perceived differently. Tablets, however, are bought outright, for their full price, and at $500/€500, it's not "a laptop and a tablet", but "a laptop or a tablet". This sentiment is a hugely limiting factor for tablet sales to truly take off in the way smartphones and laptops have.

Lower the price, and lots of more people are suddenly willing to spend money on a tablet. This price drop has demonstrated that there is a huge market for cheap tablets, and this market is currently not being served at all. The TouchPad's $99 price is a sign of things to come for the tablet market.

[kennynah]

The same can be said of LV, gucci, prada bags but these oligopolies aren't ready to take this path of slicing profit margins..except for a new entrant whose agenda could be to seriously hurt it's competition

[iam802]

Got to love HPQ. Their board can actually vote for a CEO without having interview or meeting him.

--
Voting to Hire a Chief Without Meeting Him
http://www.nytimes.com/2011/09/22/busin ... wanted=all

The mystery isn’t why Hewlett-Packard is likely to part ways with its chief executive, Léo Apotheker, after just a year in the job. It’s why he was hired in the first place.

The answer, say many involved in the process, lies squarely with the troubled Hewlett board. “It has got to be the worst board in the history of business,” Tom Perkins, a former H.P. director and a Silicon Valley legend, told me.

Interviews with several current and former directors and people close to them involved in the search that resulted in the hiring of Mr. Apotheker reveal a board that, while composed of many accomplished individuals, as a group was rife with animosities, suspicion, distrust, personal ambitions and jockeying for power that rendered it nearly dysfunctional.

Among their revelations: when the search committee of four directors narrowed the candidates to three finalists, no one else on the board was willing to interview them. And when the committee finally chose Mr. Apotheker and again suggested that other directors meet him, no one did. Remarkably, when the 12-member board voted to name Mr. Apotheker as the successor to the recently ousted chief executive, Mark Hurd, most board members had never met Mr. Apotheker.

“I admit it was highly unusual,” one board member who hadn’t met Mr. Apotheker told me. “But we were just too exhausted from all the infighting.” During Mr. Apotheker’s brief tenure, once-proud H.P. has become a laughingstock in Silicon Valley. Its results have weakened, its stock has plummeted and his strategy shifts have puzzled people inside and outside the company. Hewlett did not respond to an email seeking comment.

The immediate cause of dissension was the board’s decision in August 2010 to demand the resignation of Mr. Hurd, who had himself assumed the top position in the midst of board leaks and a phone pretexting scandal surrounding efforts to determine the source of the leaks that had laid bare irreconcilable differences among directors. He had replaced Carly Fiorina, who was also summarily ousted by the board.

....

[kennynah]

this ceo is really screw up.... he has to assume the responsibility for the gargantuan drop in HPQ shares price

[iam802]

It's official.

Whiteman is new CEO. Apotheker out.

http://www.reuters.com/article/2011/09/ ... 0I20110923