An 'Icahn Push' Might Be the Best Thing for H-P (HPQ) Investors

December 10, 2012 1:42 PM EST
Earlier, Hewlett-Packard (NYSE: HPQ) shares popped on suggestion that activist investor Carl Icahn is building a stake in the electronics giant. He might be getting in over his head on this one, unless he can somehow convince Hewlett-Packard to divest the company or sell itself as a whole. The latter will clearly be a challenging task.

H-P is being hampered by its printer unit, even more so than its Personal Systems Group. While PCs are being replaced handily by mobile devices and cloud storage, the exact same thing is happening with printing.

Just today it was reported that Square wants small merchants to eliminate gift cards in favor of a mobile version. That's less printing that H-P will need to supply. Good for trees, bad for investors.

Recent data aggregated by has Gartner forecasting printer and supplies sales dropping from $50 billion in 2010 to $47.8 billion in 2014. (H-P isn't a fan of Garnet's numbers, remember.) It's not a huge drop, but anti-growth is still anti-growth. IDC also reported that printer shipments fell 26 percent in the third quarter. No company should want to be a leader in that segment.

H-P currently controls a 40 percent stake in the global printer segment. watching its sales drop over 18 percent since 2008 to $24.5 billion in fiscal 2012. From amounting to 31 percent of revs, printer sales now account for 20 percent.

MSFT) Windows 8 isn't catching fire quite as fast as the company hoped, at least, by some accounts.

Heck, maybe Cisco (Nasdaq: CSCO) will just acquire the whole thing, if for nothing else than the name and distribution channel.

Shares are down almost 45 percent year-to-date, with most of the activity coming over the last few months, particularly after CEO Meg Whitman laid it on the table during an early October event. The stock is up about 2 percent Monday.

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