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Mark Hurd is the lucky one. If you're buying shares of Hewlett-Packard (NYSE: HPQ) right now, you're unlikely to escape losses owning this scream-worthy stock.

Why? HP isn't going to get anywhere near enough value for the $1.2 billion the company spent to acquire Palm, or the $2.1 billion spent to wrest 3PAR from Dell's (Nasdaq: DELL) hands. Combined, these businesses were accounting for just over $200 million in losses at the time they were bought.

This isn't to suggest that neither deal has value. To the contrary:

  • Storage is an imperative in data infrastructures and HP's primary competitors, IBM (NYSE: IBM) and Oracle (Nasdaq: ORCL), both offer storage products and services to customers. 3PAR will help fill out HP's portfolio in this area.
  • Palm, meanwhile, is poised to help HP reduce its dependence on Microsoft (Nasdaq: MSFT) for mobile and PC operating software.

But in each case, HP badly overpaid. Just as it has with most every move it's made lately.

Consider new CEO Leo Apotheker, possibly HP's most important asset right now. He's joining the company from middling German software giant SAP, where he obtained essentially zero experience that should help him lead HP in the bare knuckles fight to come. But never mind that -- Apotheker will still get $1.2 million in annual salary anyway, the same as Hurd received when he was running the company, Computerworld reports.

HP is, in effect, a zombie, eating as many brains as it can with the hopes of getting smart enough to compete with deep-pocketed, experienced rivals.

Run Fool! Run!
Fools don't typically cite overpaying for talent or acquisitions when they talk about HP, but you'll find plenty in our Motley Fool CAPS community who are as frightened of this three-star stock as I am:

"Change [in] leadership to an unproven and little regarded leader will subdue the stock [o]ver the short-term. Investor confidence will be directed to those companies in the sector that are more stable and reliable as a value proposition," wrote Foolish investor bromere earlier this month.

Recent market moves suggests he's right. Apple (Nasdaq: AAPL) is up more than 16% since the Palm deal was first announced in April. HP is down close to 20% over the same period, and the S&P 500 has run about even.

Night of the living dead developers
There's a reason investors aren't buying. HP's growth prospects aren't clear. All we know is that HP wants to be a full-service technology provider, on par with IBM and Oracle. What's missing is any evidence of an obvious, defensible competitive advantage.

Unless, that is, you count market leadership in printers as a competitive edge. (I don't.)

Time is running out for HP's Palm efforts to have any impact on Apple or Research In Motion (Nasdaq: RIMM) or even Microsoft and its well-received Windows Phone 7. Apple sold 14 million iPhones in its most recent quarter, and Windows Phone 7 is already attracting a following among developers. Twitter has an app for the OS, and is planning a version of its Kindle reader for the platform. Soon, developers are going to be too busy to care what the Palm OS can offer.

But again, don't take my word for it. According to Nielsen data, iOS, BlackBerry OS, and Android are the leading smartphone systems here in the U.S. Palm, once a player, doesn't even merit a mention.

Maybe that will change when HP introduces its first line of WebOS smartphones early next year. I wouldn't bet on it; Palm's widely acclaimed Pre didn't change when it had to go up against the iPhone.

And what about tablets? Hurd sounded the tablet theme at the time of the Palm deal, but as of today, the company is selling Windows 7 tablets. If there's value being created by the team acquired from Palm, we aren't seeing it yet.

And we may never. Because here's the truth about zombies: No matter how many brains they eat, they never, ever get smarter.

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