There are all kinds of reasons for spinoffs, as I discussed in my recent commentary. The two biggest: transparency and focus. Investors get clearer information about big company's individual business divisions; at the same time, spinoffs separate businesses that don't make sense being under the same ownership.
Admittedly, from an investor's perspective there is no such thing as too much transparency. But upping the information quality of Hewlett's financials doesn't necessarily call for a bust-up. We are not talking about a corporate jumblea laGeneral Electric
Moreover, advantages exist for keeping the businesses clumped together. PCs and printers go hand in hand -- they share a lot of the same core technology, plus common distribution and marketing channels. There is little to suggest that the two get in each other's way at all. Dell Computer's
Besides, doing the splits can be painful. Dividing expenses like R&D and the cost of maintaining a global presence would add to the overall costs of doing business -- without adding any revenues. To experience full upside from a spinoff, investors might have to wait an awfully long time before the process is completed.
Merrill Lynch's Mr. Milunovich -- not to mention many Hewlett-Packard shareholders -- thinks something needs to be done to revive the shares. Agreed. But a spinoff is not the thing to do the trick.
Fool contributor Ben McClure hails from the Great White North. Ben owns shares in Dell.