COMPANIES
HP faces break up pressure
Big drop in value raises shareholder concern
- By Washington Technology staff
- Dec 10, 2012
After seeing its value drop more than $72 billion from what it was in 2011, Hewlett-Packard is feeling pressure to break itself up,
according to an article from the U.K. Telegraph.
The company is now worth $27.2 billion, as opposed to being worth more than $100 billion in 2011.
One of the contributing factors to this potential action is the company’s current struggle with Autonomy, a British software firm that it bought for $10 billion last year. HP has accused Autonomy of accounting improprieties resulting in the misrepresentation of its business. Mike Lynch, Autonomy founder, denied the allegations, Telegraph said.
Shareholders are also very concerned with some of the company’s thought processes, especially its suggestion last year that it should discontinue making PCs, after it invested a great deal through acquisitions of computer companies like Compaq. Telegraph reported that HP had been the largest PC manufacturer in the world until China’s Lenovo overtook the company’s lead earlier this year.
“If they want to try to fix [the situation] immediately, it would be by splitting up the company. That’s exactly what they have to do,” Telegraph quoted Michael Mullaney, chief investment officer at Fiduciary Trust, as saying to Bloomberg.
HP's government business is ranked No. 7 on Washington Technology's 2012 Top 100 list of the largest government contractors.