Is HP going bankrupt? Stock crashed and layoffs?

Question

I'm worried HP is going bankrupt. The stock crashed this week. Their brand new touch pads are like $99 down from 500 just a month ago and they said they're closing their computer business, they're the largest PC maker! What's going on?!! When will people be laid off?

Answer 1

While I do not think HP will go bankrupt, the fact is that they have had several problems over the past decade or so.



The decline started, in my opinion, with their foray into the world of digital photography, when Lou Platt was CEO. They ultimately exited that business after losing billions.



Then they hired Carly Fiorina, who really took the company apart ( buying Compaq and losing billions more, now that they are exiting the PC business ) and left it in a huge mess for Mark Hurd.



Hurd was a good executive, and was actually steering HP in the right direction, but got himself fired ( with a $12M severance package ) for playing footsies with a young woman. Too bad, for him and for HP. the young woman represented by Gloria Allred sure made out OK.



Now we have this guy Leo Apotheker, who has agreed to buy a British company for $10 B, which I think will be the death knell. And what is the purpose of buying this company?



They are trying to go head-to-head with IBM in Enterprise Software, which is IBM's total strength. I don't think too many companies would abandon IBM to allow HP , a company with so many missteps and management gaffes, to take over their mission critical processes.



I suspect they will continue to shrink, and perhaps one day they will be bought out by someone like Oracle or Microsoft, or Apple. Too bad, they were a very strong and ethical company in the 70's and 80's.

Answer 2

They are not going banckrupt, and no one is going to be laid off.



Actually, if you remember, the stock price started to depreciate for quite a while, but it was not that much to be recognized.

Investors have concerns that the management is not taking clear direction in the business. I mean HP, is huge PC and Color Printer makers, but in the last week two companies announced that revenue from PC will be less than forecast in the future. Those are DELL, and HP. So, when DELL told investors about this bad news, the stock declined more than 10% in one day.

In case of HP, the stock decline almost 30% in the past two days. Reasons are, the touch pads are not making good revenues and obviously cannot compete with the IPad. This makes HP investment in the software maker Palm last year, a waste of money. In fact, HP executives admitted that last week. That's why, they said will change their business strategy to include cloud computing storage and software services to compete with Oracle and IBM. However, investors are still worried because this will take years, and have concern that the latest $ 10 Billion of British company takeover may be huge mistake. In the mean while, both PC, Laptop, and touch pad will suffer from APPLE's products. Also, APPLE announced it will introduce new IPAD at the begining of next year.



As a summary, APPLE revenue and profits are climbing to records, while PC makers in general are trying hard to keep sales growing.

Expectation, HP will suffer just like Research in Motion, the stock price will be too volitaile in trading, but will stay lower, and will decrease as long as the company cannot compete enough.

Short term investment may help to make profits, but not for long.

RIMM decline from high of $ 80 few years ago to $ 26 now adays. Reason is the IPhone and Android OS.



I hope this will help.

Answer 3

HP will have massive layoffs for sure. As an IT exec i can tell you that the only way they got this approved by the board was to show the ability to put some savings on the books, period. They have has so many mistakes that are obvious to others that the board needs to be replaced, just like Cisco.



The board members at HP and Cisco are friends of the CEO and no major changes will happen on the board level.



HP has so many issues from having 2x the employees that they need to run the business to thinking they can sell enterprise software. Huge mistake to hire this new SAP CEO. All he knows is software and he will try to make HP a software company, it will fail for sure.

Answer 4

Relax yourself. HP is not going bankrupt. Whoever told you that is either high on crack, or maybe angel dust.



HP is a huge company, they have a good market share in Computers/laptops... the touchpad tablet was just another product of theirs.



People won't be laid off because no Bankruptcy is happening. Blackberry's stock (RIMM) is down from $59 to a low of $23 does that mean they are going bankrupt ? No.



Consult you're financial advisor because you obviously know nothing about investing/companies.

Answer 5

They are scrambling but they are not going bankrupt. There may be job losses however.