This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

'The Office' of the CEO: HP's Revolving Door

Hewlett-Packard's performance under Hurd was solid -- including taking the stock from $21 to $42 while also placing the company on a strategic path into areas such as networking and mobility. These visions were nonexistent prior to Hurd's arrival, nor have these businesses flourished since he left. As with the departure of bad boss Steve Carell on "The Office," Hurd's departure from HP shook Wall Street, which was understandable.

After trading as high as $47 in August 2010, HP's stock has plummeted to a 10-year low of $11.35. Although the stock has rebounded over the past several months to around $21, I still wonder where HP would have been today had he not left. Hurd was ousted when sexual harassment allegations surfaced regarding an outside contractor, Jodie Fisher. On the show, this was par for the course -- it was expected and nobody told. Even Toby, the HR personnel for Dunder Mifflin's Scranton branch, looked the other way.

Essentially, had HP handled this situation differently, who knows where the company would have been today? Maybe Autonomy would have happened and maybe it wouldn't. The fates of HP's biggest rivals today could have taken different paths. Apple (AAPL) still would have been Apple. But I don't think for a second that HP's competitive deficit would have been so significant as it is today.

Hurd's not coming back, regardless of what I think. Although Whitman seems to be keeping a good pulse at HP today, the company still faces major hurdles going forward. To her credit, it does appear that her restructuring moves are working. I just don't think it makes HP any more viable. PCs are not making a comeback and the company still has no meaningful mobile strategy.

Making matters worse, while Hewlett-Packard is busy trying to stop its bleeding, Cisco (CSCO) and Oracle are making investments into new end-markets. This means regardless of the any progress seen in HP, the company will still be behind.

The good news is that with cash flow jumping up 115% in the first quarter to $2.6 billion, HP does not look like a company ready to be cast off to the glue factory. But the lights in the office are dimming.

At the time of publication the author had a position in AAPL.

This article was written by an independent contributor, separate from TheStreet's regular news coverage.
Richard Saintvilus is a private investor with an information technology and engineering background and the founder and producer of the investor Web site Saint's Sense. He has been investing and trading for over 15 years. He employs conservative strategies in assessing equities and appraising value while minimizing downside risk. His decisions are based in part on management, growth prospects, return on equity and price-to-earnings as well as macroeconomic factors. He is an investor who seeks opportunities whether on the long or short side and believes in changing positions as information changes.
2 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
HPQ $11.45 0.00%
AAPL $93.24 0.00%
FB $117.81 0.00%
GOOG $701.43 0.00%
TSLA $211.53 0.00%


Chart of I:DJI
DOW 17,660.71 +9.45 0.05%
S&P 500 2,050.63 -0.49 -0.02%
NASDAQ 4,717.0940 -8.5450 -0.18%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs