Hewlett-Packard’s Troubles Leave Investors Wary of Apotheker’s Vision

Leo Apotheker has watched Hewlett-Packard’s stock price drop nearly 44% since he took on the CEO position in November. While watching the technological empire crumble around him he may have though a big move was in order.

Alas, he struck out once again.

On August 18th’s HP’s press release announced his $11.7 billion (overpriced) purchase of British software company Autonomy, its failed webOS and touchpad endeavour, lower full year FY11 revenues, not to mention his visionary sell-off/spin-off of HP’s PC division. Shareholders were not pleased, as represented by the 22%, or $16 Billion, drop in value on Friday, and rebounded a mere 3% on Monday.

It seems Apotheker’s made a few bad calls. Time will tell if his vision was worth the hit in the long term. Short term, investors are angry and the talk of activist investors has entered the mix.

“We wonder whether activist investors will — and should — begin to exert pressure on the board,” said Toni Sacconaghi, an analyst with Sanford Bernstein. “If HP’s results don’t improve, the company will ultimately restructure its portfolio and/or replace its leadership.” (via Reuters)

According to Wharton management professor Dan Levinthal, HP is making a key strategy error in trying to replicate competitors’ positioning instead of carving out a distinctive niche. (via knowledgetoday.com)

HP leaves a lot to be answered. Will HP find a buyer for its PC division sooner rather than later? Will activist investors swoop in and turn things around at HPQ? Will Apotheker be dethroned as HP’s CEO or is his vision a good one, even if too few others recognise it?

Interested in trading on HP’s rocky future? We’ve included a couple of Kapitall’s interactive charts to help you along:

As shown by the Turbo Chart, IBM has underperformed the S&P 500 index for nearly the whole year.

Wall Street analysts appear to be cautiously optimistic on the company’s outlook. The stock currently has a “Moderate Buy” rating (lower than most competitors, as shown by the Compar-O-Matic):