That was quick.
Hewlett-Packard (NYSE: HPQ) CEO Leo Apotheker has been in office for just under a year, but Bloomberg is reporting that HP's board is already contemplating giving him the boot. It would seem that the board isn't too happy with the direction that Apotheker wants to take the tech bellwether. In his short time in the driver's seat, he's cut revenue forecasts three times, and watched shares shed 47% of their value.
Investors expressed their disappointment with his vision of the "HP of the future," as shares fell 20% after the announcement to drop webOS hardware and PC operations and pick up Autonomy at a major premium, representing a major shift in focus from hardware to software.
But then again, what did they think was going to happen when they put a software guy in charge? Rumors suggest former eBay (Nasdaq: EBAY) CEO Meg Whitman as a potential interim replacement, who joined the board earlier this year.
HP Chairman Ray Lane recently brought up the possibility that HP may, in fact, opt not to spin off the PC business. Lane said, "If we don't make that decision, it's because of two things: We can't offer a better proposition to customers and investors. If we can't, it stays inside HP." His comments undermine Apotheker's desire to transform HP into an enterprise software company that would compete head-to-head with IBM (NYSE: IBM) and Oracle (Nasdaq: ORCL).
HP shares have jumped on the prospect of a new CEO, trading up 11% and pushing higher as of this writing, after being down for the day prior to the news.
The company has been a mess lately. When I said that HP is comfortably numb, I was mainly referring to how it has bungled webOS. But clearly, that's an apt description beyond that dying platform. The board hands the keys to the former CEO of a software giant, and then wants them back when he starts gunning for software?
Go ahead and kick out Apotheker; shareholders clearly think it's the right call. But next time, the board might want to actually read the resume of any potential long-term successor, so they know what to expect once he or she is at the helm.
- Add Hewlett-Packard to My Watchlist.
- Add Oracle to My Watchlist.
- Add IBM to My Watchlist.
- Add eBay to My Watchlist.
