HP Has Second Thoughts on PC Unit Spin Off

October 13 00:00 2011

New York, October 13 (RainbowNewsLine.com) – Hewlett Packard (HPQ) is having a second look at its plan to spin off its personal-computer division. New analyses by HP and its advisors show that it might not be as profitable as previously estimated because the benefits of the spinoff would be outweighed by its cost. Meg Whitman, the newly-appointed chief executive, is re-analyzing the figures of the proposal by her predecessor, Leo Apotheker.

She is also considering the negative impact of the absence of the PC business like HP’s volume clout with component suppliers, supply chain complications, and reduced margins on business lines such as servers.
Moreover, Whitman is analyzing different options provided to her by Jeffries Group, who have advised her to settle matters with Oracle, improve relationships with SalesForce and Microsoft, re-engineer PC designs and user interfaces, or commit to mobile devices.

HPQ is down 0.19% and is trading at $25.87 today. Its shares are down 37.32% in one year. The trading range of its stock for the year is between $21.50 and $49.39.

Whitman has not yet made any decision and has said that she would like to decide by the end of the month. Whitman, previously CEO of eBay, took over from Apotheker just weeks ago.