Saturday, August 20, 2011

Hewlett Packard Stock drops 23%

Yesterday Hewlett Packard announce plans to get out of the computer business by spinning off or selling off the computer division. The suits complained that manufacturing computers was a low margin business and they wanted to move into software and services. No matter that they are the #1 computer maker since they bought up Compaq some years ago. Then they announced plans to buy a British software company for $10 billion.

Today HP stock dropped 23% as investors decided that the HP suits were out of their minds.
HP did something like this ten years ago. The company got started and had been a powerhouse in the electronic test equipment business. In 2000, HP spun off the test equipment group and "Agilent Technology" a new firm that has down fairly well.

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