Updated from 11 a.m. EST
were under pressure Monday as investors worried about executive succession and a report saying
was getting ready to kill its category.
The shares were recently down 9% to $15.20 after H-P said Michael Capellas was stepping down as president, reportedly to take the top job at
. Capellas, a respected operations manager who was reportedly coveted by WorldCom for his performance during the tumultuous merger of Hewlett-Packard with Compaq, was seen by some as the obvious successor to H-P Chief Executive Carly Fiorina.
That concern was the basis for a pessimistic note from Merrill Lynch technology analyst Steve Milunovich, who called the departure "a negative" for Hewlett-Packard. "Investors may doubt that CEO Carly Fiorina can handle such a big job herself," Milunovich wrotes. "If Capellas left, she might need to find a replacement."
The Wall Street Journal
reported Monday that Capellas was the leading candidate to take over the WorldCom CEO job from John Sidgmore. The appointment of such a well thought-of executive was being viewed as more evidence WorldCom's turnaround was viable. The company took out advertisements in the financial press over the weekend saying it was producing sufficient cash and had enough available credit to thrive.
"I'm comfortable making this move because of the progress of the integration, H-P's market momentum and the strength of the management team," Capellas said in the statement.
Potentially also pressuring shares of Hewlett-Packard was a story saying Wal-Mart, the world's biggest retailer, was preparing to launch its own line of personal computers.
quoted an analyst who said the company was 12 to 18 months away from contracting its own PC out of Asia, although a company spokeswoman said the retailer had no such plans.
H-P is currently Wal-Mart's largest PC supplier, but ever since the Compaq merger analysts and industry observers have wondered who would emerge to fill the No. 2 void.