On Friday, Aug. 6, Mark Hurd resigned from Hewlett-Packard (NYSE: HPQ), the apparent fallout from charges of questionable judgment with a certain lady. HP promptly lost $10 billion in market cap. It was a bad day for Hurd, a lousy day for investors -- but a great day to be short HP.

And I believe it's only going to get better from here.

Meaning, "worse"
$10 billion in a day. You might think that was a big load for the HP shorts. But the ensuing media firestorm, with Oracle's (Nasdaq: ORCL) Larry Ellison stepping up to defend his friend by firing a scathing broadside at HP's board, has cost HP even more market cap in the subsequent days. Including last week's market rout (admittedly not an HP-specific event), the stock's down a total of $13 billion since Hurricane Hurd hit it. With HP shares now trading for a bare 11.6 times trailing earnings, and a single-digit multiple to next year's projections, an investor could be forgiven for thinking now's the time to step up to the plate and take a position in HP.

In fact, that's my opinion, too. I just happen to believe that the position you should take is short HP. Now here's why.

Less fun than a barrel of monkeys
Once upon a time, legendary investor Peter Lynch confided to his followers: "I like buying companies that can be run by monkeys, because one day they will be." This, in a nutshell, is the short thesis for HP haters. Simply put, HP is no longer capable of being successfully supervised by simians.

Consider: Over Hurd's tenure, HP has bought first EDS, then 3Com, then Palm in rapid succession. Some of these buys have real potential (EDS.) Others (Palm), less so. But importantly, each of HP's new subsidiaries now needs to be integrated into the mothership -- but the man with the plan for their integration, the CEO who turned the company around ... is no longer there to oversee the work.

How important was Hurd to HP? A few months back, I used Hurd's tenure at the helm of HP to illustrate just how important having a stellar CEO can be for a company's performance. Not to overstate, but it's very often the difference between success and failure. Earlier this week, my Foolish colleague Eric Bleeker painted the picture for us even brighter, with just a few quick calculator strokes. I think they're so important that I'm going to repeat them for you here:

TimeĀ 

Sales (TTM)

Profit Margin (TTM)

Return on Equity (TTM)

When Mark Hurd Took Over HP

$83.3 billion

4.3%

9.3%

Today's HP

$120.4 billion

7.1%

20.3%

Again, not meaning to overstate, it looks to me like HP-plus-Hurd was a company roughly twice as good as HP without him. And now that HP is without him, I think the company's in for an awfully rough ride.

How rough will it get? Larry Ellison doesn't mince words:

The HP Board just made the worst personnel decision since the idiots on the Apple Board fired Steve Jobs many years ago. That decision nearly destroyed Apple and would have if Steve hadn't come back and saved them. HP had a long list of failed CEOs until they hired Mark who has spent the last five years doing a brilliant job reviving HP to its former greatness.

Less fun than a barrel of monkeys
Consider the array of threats now facing Hurd's as-yet-unnamed successor. First and foremost, there's the ongoing, neverending duel to the death with archrival Dell. HP didn't fare so well in that contest prior to Hurd's arrival. I shudder to think what his departure might mean for the company.

And that's the least of HP's problems. In addition to Dell, HP now faces a whole slew of formidable opponents in the new markets that Hurd invaded. Markets which HP must now fight to win without its commander in chief. Last year's purchase of 3Com, for example, puts HP in conflict with Cisco (Nasdaq: CSCO) and Juniper (Nasdaq: JNPR) in the market for Internet and telecom communications equipment. This year's Palm push adds Apple (Nasdaq: AAPL), Nokia, and Research In Motion (Nasdaq: RIMM) to the competitive mix. Meanwhile, as the new proprietor of EDS since 2008, you have to expect that HP is now squarely in IBM's (NYSE: IBM) crosshairs.

Caution: Rhetorical questions ahead
By now you have probably guessed my opinion on these questions, but I'll ask 'em anyway: Are these really the kinds of companies you think just anyone can beat? Or does HP require someone a bit more competent than the average monkey occupying the CEO's chair, if it's to have any hope of (a) integrating its new purchases successfully, and (b) managing them to competently combat all the new rivals it's taken on?

Right now, HP's board is sitting round a table, fingering a pile of darts and pondering the pincushioning of a dartboard -- but beware: Not just any executive in a monkey suit can run this company, not in its current state. And so I tell you: Unless and until they find a replacement suitable to fill Hurd's shoes, there's still time to short HP.

If you're looking for other short opportunities, my Foolish colleague John Del Vecchio, CFA, a leading forensic accountant, offers a list of warning signs to look for in this free special report -- "5 Red Flags -- How to Find the Big Short." Simply enter your email in the box below, and I'll send you the report. It's free.