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Hewlett Packard (NYSE:HPQ) has been a roller-coaster ride for investors as the company changed major plans within a period of two months. Leo Apotheker, HP's former CEO, planned to sell or spin off its PC division and focus on the software and services division. This included the $10 billion purchase of Autonomy, the second largest pure software company in Europe.

HP has since fired Apotheker and announced that Meg Whitman, formerly of eBay (NASDAQ:EBAY), will be replacing him as CEO. HP stock jumped as high as 13% on the rumor of a Meg Whitman appointment. These gains were short-lived, as HP stock quickly dropped the next day, erasing all previous gains.

Many believe the sell-off was due to investors being disappointed about Meg Whitman taking over as CEO. This is incorrect; after all, the stock did rally 13% when the rumor circulated about a possible Meg Whitman appointment. The sell-off instead has to do with investors being disappointed about statements from the company's chairman, Ray Lane:

"We have no intention of getting out of the PC business," the company's chairman, Ray Lane, said in an interview. "If others might look at HP saying, you know, it's worth more as parts versus the whole. We should be willing to look at ourselves that way. So, we did," he went on to say.

This is the issue investors are having. A spin-off would have allowed investors to further realize the value of the company while still being involved in the business. This would have allowed investors to value each division separately and invest in the faster-growing HP software and service business separately. The company's decision to maintain it's PC business will hurt investors as the company is draggeddown by the slowing PC business. The consumer PC division's revenue dropped 20% year-over-year.

HP was correct to focus on the Software and Service business, but the decision to keep the company as one will hurt shareholders. I expect to see further downside as investors realize they will see more of the same bad decisions going on at HP. You add in the $10 billion purchase of Autonomy, and investors won't be too happy.

I'm now bearish on HP based off the decision by the company to continue the same old bad policies. After all, Meg Whitman was an HP board member for several years. I was originally bullish on the company, hoping to take advantage of the spin-off. With that now off the table, I don't see a bright future for HP just yet. I will look to short rallies. I will remain bearish on HP until I see signs of the company cutting costs in the PC division or signs of an economic turnaround that could drive consumer PC growth once again.

Disclosure: I have no positions in any stocks mentioned, but may initiate a short position in HPQ over the next 72 hours.

Source: Behind HP's Sell-Off: More Bad Management Decisions