"One of the first questions I get is, what is HP?" new CEO Meg Whitman noted in today's HP's (HPQ) conference call.
That is the question I and everybody in the investing world is asking. So okay, what is it?
We didn't get an answer today. To be fair, Meg's only been at her post five weeks. We did get a resolution surrounding one of the biggest screw-ups of the year: HP will keep its personal systems group (PSG). Apparently, PSG's synergies exceed $1 billion a year and operations are so intertwined that spinning off PSG would require $1.5 billion start-up costs.
I'd been advocating spinning the PC division off. In my frustration with management and the board, I wanted to see the hapless giant splinter into 4 or 5 separate pieces, just to get out from under the board's blundering ways. After all, we had front row seats to the soap opera surrounding CEO Mark Hurd's ouster. Next, HP gave us Leo Apotheker and his series of blunders. Then, maybe, HP would spin off its PC division and then again, maybe it wouldn't. And, to cap it off, HP gobbled up Autonomy at nose bleed prices, only the latest in a $43 billion string of questionable acquisitions. You couldn't plan a better way to crater a stock.
Perhaps, Meg Whitman's leadership will be the real deal. In the call, HP promised "clarity," a end to "uncertainty," "mixed messages," all of which will be needed to cure this floundering company.
Whitman noted correctly "HP tries to do a lot of things. And I’m a big believer in doing a small set of things really, really well.” Her words are welcome. HP has become a pastiche of tech businesses all stuck together, a vast but sometimes puzzling array of add-ons.
A little bit of focus would be greatly appreciated, Meg. Let's see some intelligent moves to right this once great company.