Will HP's (HPQ) New Interim Chairman Push for Split?
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Rating Summary:
16 Buy, 20 Hold, 2 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 11 | Down: 12 | New: 13
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Yesterday it was learned that HP's (NYSE: HPQ) Chairman Ray Lane has stepped down. The move follows declining shareholder support in the wake of the company's highly criticized Autonomy acquisition. Lane was replaced by interim chairman Ralph Whitworth, who runs activist hedge fund Relational Investors. The hedge fund owns 34.5 million shares of or a 1.8 percent stake in HP.
Less than a day after the announcement speculation is growing that, given Whitworth's activist roots, he will waste little time pushing for split of the PC-maker. Some investors see this as a way to unlock shareholder value. However it contradicts previous statements by the company's CEO Meg Whitman. Additionally, pressure to split the company may have waned recently considering to the stock's outperformance of late. Year-to-date Hewlett-Packard stock is higher by almost 50 percent.
Commenting on developments, analyst Ananda Baruah of Brean Capital said, "While Relational has a history of pushing companies to unlock shareholder value (L3, ITT, Home Depot), it would be premature expect any renewed push for a break-up of HP. In fact, Mr. Whitworth stated that the Board will be seeking a CEO to fill his interim role."
However, Baruah notes that Whitworth's new role creates an "interesting wrinkle regarding unlocking value." In any case, investors will without a doubt keep close tabs on HP's new interim chairman.
Brean Capital has a Hold rating on Hewlett-Packard.
For an analyst ratings summary and ratings history on Hewlett-Packard (NYSE: HPQ) click here. For more ratings news on Hewlett-Packard click here.
Shares of Hewlett-Packard closed at $22.30 yesterday.
Less than a day after the announcement speculation is growing that, given Whitworth's activist roots, he will waste little time pushing for split of the PC-maker. Some investors see this as a way to unlock shareholder value. However it contradicts previous statements by the company's CEO Meg Whitman. Additionally, pressure to split the company may have waned recently considering to the stock's outperformance of late. Year-to-date Hewlett-Packard stock is higher by almost 50 percent.
Commenting on developments, analyst Ananda Baruah of Brean Capital said, "While Relational has a history of pushing companies to unlock shareholder value (L3, ITT, Home Depot), it would be premature expect any renewed push for a break-up of HP. In fact, Mr. Whitworth stated that the Board will be seeking a CEO to fill his interim role."
However, Baruah notes that Whitworth's new role creates an "interesting wrinkle regarding unlocking value." In any case, investors will without a doubt keep close tabs on HP's new interim chairman.
Brean Capital has a Hold rating on Hewlett-Packard.
For an analyst ratings summary and ratings history on Hewlett-Packard (NYSE: HPQ) click here. For more ratings news on Hewlett-Packard click here.
Shares of Hewlett-Packard closed at $22.30 yesterday.
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