Seeking Alpha
 

Hewlett-Packard Co. (HPQ)

- NYSE
  • Tue, Apr. 21, 10:06 AM
    • Looking to streamline ahead of its PC/printing spinoff, HP (HPQ -0.7%) is selling its Snapfish online photo-printing/storage unit to digital photo fulfillment services firm District Photo for an undisclosed sum. The deal is expected to close in the second half of FY15 (ends in October); Snapfish will continue using HP's printing hardware/software afterwards.
    • HP bought Snapfish for over $300M in 2005. Reuters reported last September the IT giant was thinking of selling the unit; Bloomberg reported a month later P-E firms had decided to pass. Rival Shutterfly (SFLY -1.1%), also the subject of M&A rumors, is slightly lower today.
    • Separately, HP has announced it's partnering with threat-prevention hardware/software/services leader FireEye (FEYE +3.5%) to deliver "a comprehensive suite of security remediation services underpinned by FireEye's advanced threat detection, intelligence, methodologies and incident response expertise."
    • The joint offerings, which will be sold by HP's massive IT services arm, include a global incident response and compromise assessment services from HP and FireEye's Mandiant unit (hired by many firms to probe cyberattacks), and managed threat-protection services that "provide 24/7 security monitoring for indications that a cyber-attack has bypassed traditional technology defenses."
    • News of the alliance comes a day after FireEye announced a partnership with firewall vendor/HP rival Check Point. FireEye's Q1 report arrives on April 30.
    | 3 Comments
  • Thu, Mar. 26, 4:29 PM
    • HP (NYSE:HPQ) is close to selling a 51% stake in its H3C Technologies Chinese networking hardware unit to state-backed Tsinghua Unigroup, the WSJ reports. Echoing an October report about HP's sale efforts, the paper states H3C is "worth roughly $5 billion in total."
    • Sources state a sale might include "a separate server operation," and could still be a few weeks away. Tsinghua is said to be competing with other bidders, including investment firm China Huaxin.
    • Tsinghua has bought Chinese chipmakers RDA and Spreadtrum, and since formed a mobile processor partnership with Intel. HP, meanwhile, saw its networking revenue fall 11% Y/Y in the January quarter, something that was blamed on "execution issues" in the U.S. and China. Like other U.S. enterprise IT firms, the NSA scandal has taken a toll on HP's Chinese sales.
    • The report comes as HP gets set to acquire enterprise Wi-Fi hardware/software vendor Aruba Networks ahead of a PC/printing spinoff expected to occur by the end of FY15 (ends Oct. '15).
    | 1 Comment
  • Mon, Mar. 2, 8:49 AM
    | 5 Comments
  • Wed, Feb. 25, 3:16 PM
    • Bloomberg reports HP (HPQ -10.1%) is in talks to acquire enterprise Wi-Fi hardware/software provider Aruba Networks (ARUN +22.5%), and that a deal could be announced as soon as next week. Aruba has skyrocketed on the report, and has taken rival Ruckus (RKUS +4.7%) higher with it. Aruba's market cap is now around $2.5B.
    • Aruba is the enterprise Wi-Fi market's #2 player - behind Cisco (NASDAQ:CSCO), which towers over the space - and HP is also in the top-5. IDC estimates Cisco, Aruba, Ruckus, and HP respectively had Q2 2014 enterprise Wi-Fi shares of 46.8%, 11.8%, 6.2%, and 4.5%.
    • HP, whose shares have plunged today due to an FQ1 revenue miss and soft guidance, saw its total networking revenue drop 11% Y/Y in FQ1 - "execution issues" in the U.S. and China were blamed. The IT giant has suggested it's open to making enterprise acquisitions ahead of its PC/printing spinoff.
    | 5 Comments
  • Mon, Feb. 9, 7:14 PM
    • HP (NYSE:HPQ) is acquiring Voltage Security, a provider of enterprise encryption, tokenization, and encryption key management software for e-mails, documents, payments data, and other content. Terms are undisclosed.
    • Voltage's offerings will complement HP's Atalla data/payments security software. The IT giant praises the ability of Voltage's products to "allow enterprises to use protected data in applications without having to re-architect their applications or adopt fragmented frameworks" - technologies such as format-preserving encryption and stateless tokenization help - and proclaims the deal will allow it to "offer customers unparalleled data protection capabilities built to close the gaps that exist in traditional encryption and tokenization approaches."
    • Security spending has been easily outpacing broader IT spend, and that trend is expected to continue in 2015 as companies invest heavily in cybersecurity following a slew of high-profile breaches. However, fast-growing upstarts such as Palo Alto Networks, FireEye, and Fortinet have been taking share at the expense of IT giants.
    | 4 Comments
  • Sun, Jan. 18, 12:57 PM
    • TechCrunch reports Google (NASDAQ:GOOG) is interested in acquiring Softcard, the mobile payments platform launched by AT&T (NYSE:T), Verizon (NYSE:VZ), and T-Mobile (NYSE:TMUS) in 2010 - it was previously known as Isis, before changing its name for obvious reasons. Though Softcard's owners have invested hundreds of millions in the venture, sources state Google's purchase price could be below $100M.
    • Like Apple Pay and Google Wallet, Softcard relies on NFC radios to enable transactions. And like Wallet, it has struggled to get off the ground, as U.S. consumers overwhelmingly stick with card swipes. Hard data on Apple Pay usage remains limited for now.
    • Softcard recently laid off 60 employees. Meanwhile, it was reported in 2013 that Google had spent $300M on Wallet-related acquisitions, with little to show for it. The adoption of EMV (chip-and-PIN) readers by U.S. retailers could give NFC solutions a boost, by making card payments a little less convenient.
    • The WSJ reports Google is partnering with consulting giant PwC to bid on a $2B+ contract to update the DoD's electronic health records system. PwC says Google's tools could both improve the system's security and performance, and lower costs. A group featuring IBM, HP (NYSE:HPQ), and CSC has made a rival bid.
    • Ad tech firm Marin Software (NYSE:MRIN) provides some encouraging mobile search data ahead of Google's Jan. 29 Q4 report. A Marin study found mobile accounted for 49% of Q4 U.S. search ad spend, up from 42% in Q3, and that smartphone ad click rates were 38% higher than PC rates (thanks in part to accidental clicks?). On the other hand, mobile still only accounted for 32% of conversions.
    • Medium writer Backchannel provides a deep dive into Google Search's evolution in an  era where users increasingly want search engines to know the precise meaning of their queries. Part 1 looks at Google's efforts to optimize for mobile (aided by its Knowledge Graph and Google Now). Part 2 looks at Google's real-world research into the information needs of users. Part 3 looks at Google's investments in A.I./deep learning to deliver far more intelligent search results and spontaneously surface useful information.
    | 5 Comments
  • Oct. 24, 2014, 4:30 PM
    • The WSJ reports H-P (HPQ -0.1%) wants to sell at least 51% of H3C Technologies, a Chinese subsidiary that has grown to become the country's top enterprise switch/router vendor. A source thinks the unit could fetch $5B in a full sale. P-E firms are reportedly being contacted.
    • H3C has over 5K employees. It was originally formed as a JV between 3Com and Chinese IT giant Huawei. 3Com bought out Huawei's stake for $882M in 2006, and was in turn acquired by H-P in 2010.
    • In addition to switches and routers, H3C sells Wi-Fi access points/controllers, firewalls, and cloud and network management software. A fair amount of overlap exists with H-P's  core networking unit.
    • Networking has been a relative bright spot for H-P: Sales rose 4% Y/Y in the July quarter. But the company has hinted it wants to streamline ahead of its planned split. It might also be nervous about growing Chinese government pressure on U.S. tech companies following last year's NSA spying uproar.
    | 2 Comments
  • Oct. 10, 2014, 5:13 PM
    • Bloomberg reports P-E firm Silver Lake has shelved its plans to acquire Shutterfly (NASDAQ:SFLY) and H-P-owned (NYSE:HPQ) Snapfish, with the goal of combining the two photo-printing/sharing sites. Sources add the firm is open to resuming talks.
    • Silver Lake was previously reported to be in talks to buy Shutterfly for over $50/share. H-P was reported last month to be exploring a Snapfish sale; it bought the site in '05 for $300M+.
    • Last Sunday, re/code reported H-P tried selling several major business units before deciding to spin off its PC and printing ops.
    • SFLY -6.6% AH to $43.85.
    | 2 Comments
  • Oct. 6, 2014, 5:44 PM
    • H-P (HPQ +4.7%) has used its breakup announcement to state it now plans to cut 55K jobs through its ongoing restructuring. That's up from the 45K-50K announced in May, which itself was an increase from a prior target of 34K.
    • 36K jobs have been cut through the program thus far. Headcount was at 317K as of last year.
    • H-P has also suggested much of its debt load ($19.8B at the end of July) will fall on its PC/printer unit (HP, Inc.), and that doing so will allow its enterprise IT ops (Hewlett-Packard Enterprise) to make bigger investments. Moody's and S&P have put the IT giant's debt on watch for a downgrade.
    • M&A speculation about the post-split H-P has kicked into overdrive, aided by management comments. CFO Cathie Lesjak (reiterating a July CC remark) states H-P still has "material nonpublic information" preventing it from buying back shares. Some take that as a sign EMC discussions aren't dead.
    • Meg Whitman: "I think you will see that there will be more M&A activity at the Hewlett-Packard Enterprise company than at HP Inc." Re/code has reported H-P decided on a split after failing to sell its PC, IT services, and high-end server units to various suitors.
    • Analyst commentary has been positive, though many on the sell-side still have questions. Bernstein values the enterprise unit at $21-$26/share, and the PC/printing unit at $16-$19/share. "Historically, spin-offs have fared well for shareholders, in part due to increased degrees of freedom and management focus, both of which each respective part of HP could benefit from."
    • However, the firm cautions a split could have "negative synergies" of $1B or more. Whitman has tries to calm such fears by stating the two companies will have a "supply chain arrangement" that allows them to jointly negotiate purchases (and thus maintain H-P's current buying power) when it makes sense.
    | 3 Comments
  • Sep. 22, 2014, 12:54 PM
    • A source talking with Barron's: "They’ve been talking for months and months about this ... Yes, it hit a snag in July, and then resumed in August, and now it took a pause again in September. It could resume ... They were very close last week, and then things went on pause. Things feel very imminent-ish."
    • The source (possibly hoping to bring an EMC suitor to the table) adds Cisco and Oracle are also viewed as potential EMC (EMC +1.3%) buyers. He/she also says a full VMware (VMW +1.1%) spinoff remains a possibility, and that EMC CEO Joe Tucci wants to complete a deal by year's end, before his planned Feb. 2015 retirement.
    • The WSJ reported overnight EMC and H-P (HPQ -0.5%) had "held off-and-on merger discussions" for nearly a year. CNBC has since reported EMC wanted a large premium, and that H-P was open to unloading its cash-cow printer unit as part of a deal. The Barron's source says an H-P printer unit sale would be "a down the road thing," if it happened.
    • The NYT has reported EMC and H-P were discussing a "merger of equals." H-P currently has a market cap of $68.3B, and EMC a market cap of $60.8B. EMC and VMware are trading higher, while H-P is off modestly amid a tech selloff.
    | 4 Comments
  • Sep. 22, 2014, 12:12 AM
    • EMC "held off-and-on merger discussions" with H-P (NYSE:HPQ) for nearly a year before the talks recently ended, the WSJ reports. The storage giant is also said to have held talks with Dell, but it's not clear where the discussions now stand.
    • The WSJ notes Cisco and Oracle are also seen as potential EMC merger partners, and reports JPMorgan is advising the company on its options. The WSJ's report follows one from the NY Post stating EMC is exploring selling its 80% VMware (NYSE:VMW) stake, in the wake of pressure from Elliott Management.
    • Beyond that, EMC and fellow IT hardware giants have seen their sales pressured by a secular shift towards cheaper hardware, and the adoption of white-label systems by Web/cloud service providers who account for an ever-growing portion of hardware usage. That might be motivating IT giants to explore consolidating, with the goals of becoming more efficient and pitching enterprise clients on end-to-end hardware/software/services offerings.
    | Comment!
  • Sep. 12, 2014, 3:43 PM
    • Hewlett-Packard (HPQ -0.6%) is exploring the sale of its web-based photo sharing service Snapfish, and has held discussions with P-E and industry buyers, Reuters reports.
    • Snapfish, which H-P bought for more than $300M in 2005 and is part of the company's printing and personal systems group, is considered a non-core asset.
    • Some of the groups that have been looking at Snapfish are said to have also expressed interest in buying another online photo-sharing services provider, Shutterfly (SFLY +0.5%).
    | Comment!
  • Sep. 11, 2014, 4:23 PM
    • Hewlett-Packard (NYSE:HPQ) is back in the acquisition game, buying Eucalyptus, and installing its CEO Marten Mickos to lead H-P's cloud effort. That role had previously belonged to Martin Fink, who will continue as CTO and director of HP labs. Terms were not disclosed, but Eucalyptus had pulled in around $55M of venture funding since being founded in 2010.
    • Mickos was once a big critic of OpenStack - upon which H-P has based its cloud strategy - two years ago calling calling it the "Soviet Union of cloud," but he's softened that stance in recent months.
    | 1 Comment
  • Sep. 10, 2014, 2:49 PM
    • CEO Meg Whitman says Hewlett-Packard (HPQ +0.5%) is again in a position to consider takeover options, a near-record cash pile gives it the means to do a deal and the worst sales forecast among computer hardware peers provides the motivation, so Bloomberg begins speculating about possible targets.
    • One possible candidate is cybersecurity firm Imperva (IMPV +8.2%), particularly in the wake if the hacking of J.P. Morgan, Home Depot and celebrities’ phones; “H-P could definitely buy them and it would make some sense," Sterne Agee's Robert Breza says.
    • Teradata (TDC -1.7%) has more of an “old-school” approach to big-data management but H-P could use it as a platform to make other acquisitions and build out its own offerings, HighMark Capital's Todd Lowenstein says.
    • Tibco Software (TIBX -0.1%) is now reviewing its strategic options, and Morningstar's Peter Wahlstrom thinks it could draw H-P's interest.
    | 2 Comments
  • Jul. 10, 2014, 12:51 PM
    • Mark Interrante, until now Rackspace's (RAX -2.1%) SVP of products and engineering, has been hired by H-P (HPQ +0.4%) to be the SVP of engineering for the company's cloud services unit
    • Both H-P and Rackspace offer cloud infrastructure (IaaS) services based on the OpenStack platform; Rackspace is an early leader within the market. H-P also offers cloud app platform (PaaS) services with the help of a partnership with Cloud Foundry (a part of EMC/VMware's Pivotal spinoff). Each company faces intense competition from Amazon, Google, and Microsoft.
    • Meanwhile, re/code states multiple sources have "categorically denied" a TechCrunch report stating H-P made a $43/share bid for Rackspace. As it is, dealReporter had expressed skepticism about the reliability of a source providing similar info.
    | 2 Comments
  • Sep. 17, 2013, 2:06 PM
    • Looking to challenge Cisco (CSCO +0.3%), Check Point (CHKP +0.9%), and market leader Palo Alto Networks (PANW +1.1%) in the growing next-gen firewall (NGFW) hardware market, H-P (HPQ -0.4%) has launched its TippingPoint NGFW line. (PR)
    • Five models are being offered, the most powerful of which offers 10Gbps of throughput. Palo Alto's high-end PA-5060 firewall offers 20Gbps of throughput. Though H-P plans to continue selling TippingPoint intrusion prevention (IPS) appliances, the functionality of its new hardware leads Gartner's Greg Young to view the latter as a replacement for the former.
    • Young estimates NGFWs have grown to make up 15% of the $8B firewall market.
    • H-P is also launching Threat Central, a cloud-based service that analyzes potential threats detected by the company's ArcSight security software.
    • Consider the moves an escalation of H-P's rivalry with Cisco. Cisco is set to acquire IPS leader Sourcefire, which has also rolled out hardware that combines NGFW and IPS features, and recently formed a managed security services unit.
    • Meanwhile, F5 (FFIV +0.8%) has acquired Versafe, a developer of online fraud protection software and a cloud-based monitoring service, for an undisclosed sum. F5 declares Versafe's products will complement its firewall and access/policy management hardware, as well as its mobile app management software.
    • Versafe can already be integrated with F5's mainstay application delivery controllers. In a blog post discussing the deal, F5 argues the ongoing rise of remote/mobile file access increases Versafe's value.
    • H-P and F5's moves comes amid growing corporate interest in cybersecurity, following well-publicized hacking events.
    | Comment!
Visit Seeking Alpha's
HPQ vs. ETF Alternatives
Company Description
Hewlett-Packard Company is a provider of products, technologies, software, solutions & services to individual consumers, small- and medium-sized businesses and large enterprises, including customers in the government, health and education sectors.