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Carl Icahn and HP — match made in heaven?

Weary Hewlett-Packard(s hpq) watchers this week were downright relieved to hear reports that Carl Icahn was sniffing around the beleaguered IT giant. The unconfirmed rumors sparked a rally in HP shares.

The company has been through the wringer over the past 5 years, so news that the famed corporate raider might swoop in and shake up HP’s board — threaten to cut loose divisions as needed to maximize share holder value —  struck them as good news.  Especially since CEO Meg Whitman is asking them to wait out a continuing  “multi-year” turnaround. Most shareholders have had it up to here with HP and waiting for it to get its act together.

In August, UBS analyst Steven Milunovich said HP would be worth more in pieces than whole, and before that a former CEO had floated the idea of selling off the PC business. That’s just the kind of thinking Icahn, chairman of Icahn Enterprises,  has perfected. Most recently, Icahn’s been up to his ears in Netflix(s nflx), snapping up shares and lobbying for the streaming media power to put itself on the block. Before that he has taken on Motorola and other tech companies.

HPQ Chart

HPQ data by YCharts

Given the damage that HP’s board has helped inflict on the corporate brand and reputation over the past 5 years, Icahn might be just what the doctor ordered. That’s a pretty sad commentary on what was the icon of Silicon Valley.

4 Responses to “Carl Icahn and HP — match made in heaven?”

  1. Hp disapointment

    anything would be better than the way HP is operating internally today. The HP culture has totally destroyed the EDS culture and combined it has created and environment of worthless 300k people all spending their time trying to figure out how not to be laid off. Clients are suffering, business growth is non existant, and working at HP is much like being in a nazi concentration camp just waiting for your turn in the chamber.

  2. It must be easy to drip off suggestions to boards of directors like: “Given the damage that HP’s board has helped inflict on the corporate brand and reputation over the past 5 years…” but it does not help anyone, least of all customers and stock holders. Anyway, it seems like HP is in good company. They seemed to totally have missed the mobile technology phase. Apple is the only large “brand” which has done serious catching up. I say catching up, because the real mobile tech phase started log before Apples iPod came on the scene. The good company? Intel, AMD, Oracle, Microsoft, Cisco, Google, Adobe… name 90% of the tech companies, and they totally missed the mobile business, they missed the growth in devices, services, technology… you name it. I guess you missed it too, or you are just looking for the fat “brands” that are now benefiting from new growth. Anyway, this shift in technology USE! Is a constant in our world. Every year there is a big product or service change that makes last year’s not profitable. Then the laggards fight it out and everyone loses somehow. Some trends, like free, ubiquitous WiFi, simply don’t turn out like they were “suppose to”. Which is a whole other thing. HP has been and is still a leader in small scale printing, beating out many Japanese leaders. HP has been doing well in laptops, beating out IBM and Toshiba in products, yet losing out in other elements of market leadership. But without the newer mobile product offering, they will keep on struggling with old generation products competing against others and eventually losing all around. Otherwise, the article is OK, it does point out what happens when you lose in today’s tech market, it’s a tough world out there, a war in every front. No company or leader is going to get it right time after time, even Steve Jobs did not get it right most of the time, he is just getting lots of attention because he got the mobile phase right. (IMHO)

  3. That’s not why the stock rallied. It rallied because it came out that many insiders including Meg Whitman are buying up lots of shares of the stock. That is a massive vote of confidence from the people that have all of the information into the health of the company.

    Meg Whitman alone bought up 1,500,000 shares just a few days ago according to reports. She is not alone. Other execs and directors have also been buying shares.