Hewlett-Packard

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    How to Profit from Massive Spin-Offs with Just One Play

    Investing in Silver

    By , Defense + Tech Specialist, Money Morning • @Robinson_STI -

    I love corporate spin-offs - and you should, too.

    With spin-offs, companies unlock hidden values in their operations and pass them on to shareholders - offering low risks and high probabilities of market-beating profits.

    And the past month or so has produced a bonanza.

    First, eBay Inc. said it is spinning off its very successful PayPal digital payments firm. Then, Hewlett-Packard Co. announced that it plans to divide itself in half.

    And most recently, security software maker Symantec Corp. joined in and said it's splitting in two.

    Overall, spin-offs are estimated to be worth $1.6 trillion so far this year.

    Here's the hitch...

Article Index

How to Profit from Massive Spin-Offs with Just One Play

By , Defense + Tech Specialist, Money Morning • @Robinson_STI -

Investing in Silver

I love corporate spin-offs - and you should, too.

With spin-offs, companies unlock hidden values in their operations and pass them on to shareholders - offering low risks and high probabilities of market-beating profits.

And the past month or so has produced a bonanza.

First, eBay Inc. said it is spinning off its very successful PayPal digital payments firm. Then, Hewlett-Packard Co. announced that it plans to divide itself in half.

And most recently, security software maker Symantec Corp. joined in and said it's splitting in two.

Overall, spin-offs are estimated to be worth $1.6 trillion so far this year.

Here's the hitch...

Hewlett-Packard (NYSE: HPQ) is a Lawyer's Dream

By , Money Morning -

After alleging last Tuesday that it had been defrauded by the management of takeover target Autonomy, resulting in a $8.8 billion write down, Hewlett-Packard Company (NYSE: HPQ) itself came under scrutiny by the Federal Bureau of Investigation.

According to Businessweek, "The FBI, responding to an inquiry by the U.S. Securities and Exchange Commission, is looking into Hewlett-Packard Co.'s allegations of accounting improprieties at its Autonomy Corp. unit, a person familiar with the matter said."

Autonomy founder and former CEO, Mike Lynch has angrily denied HP's allegations.

"HP came in with about 300 people, crawled over everything and you know what? They found nothing. And you know why? There was nothing to find," Lynch said in a television interview with The Telegraph. "What actually happened is that they mismanaged Autonomy and in doing that have destroyed a lot of shareholder value.'"

In the meantime, Hewlett-Packard CEO Meg Whitman and the rest of the board are trying to distance themselves from the decision to acquire Autonomy. Instead they're blaming former CEO Leo Apotheker and his strategy of moving HP toward becoming less dependent upon hardware and more dependent upon software for its revenue.

HP's advisors in the deal, notably auditing firm Deloitte, are scrambling to shed any responsibility for the alleged fraudulent accounts.

Deloitte, which had audited Autonomy's books for most of a decade issued a statement Wednesday saying, "Deloitte categorically denies that it had any knowledge of any accounting misrepresentations in Autonomy's financial statements."

The Deloitte statement continued, "Deloitte was not engaged by HP, or by Autonomy, to provide any due diligence in relation to the acquisition of Autonomy."

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How I "Saw" the Carnage at Hewlett-Packard (NYSE: HPQ)

By , Defense + Tech Specialist, Money Morning • @Robinson_STI -

If you've been following my advice, you avoided the carnage at the fumbling tech giant, Hewlett-Packard (NYSE:HPQ)

In fact, I told my Radical Technology Profits readers on Sept. 18 not to buy into the hype that H-P was becoming a great turnaround story.

That was after I wrote in this Money Morning article from January that H-P was one of the five tech stocks to avoid. It's lost over half of its value since then.

And had you used my Real Demand Tracking System to check out this stock, you would have seen for yourself that H-P was a lousy investment.

No, I didn't have any insider source that warned me about the accounting scandal rocking this Silicon Valley giant.

It runs deeper than that -- the fundamentals and the technicals were just plain horrible for what is clearly a deeply troubled stock.

Hewlett-Packard's Autonomy Problem

In case you missed the news, H-P got crushed last week, falling more than 11% on word that the firm is writing down some $8.8 billion in the most recent quarter.

Honestly, that's an outrage.

I know, the party line is that H-P got hoodwinked when it bought the U.K. software firm Autonomy. Seems a whistle blower has now come forward to say Autonomy's accounting practices made the company a financial house of cards.

But as I see it, there was plenty of reason for HP to have been more cautious.



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The Latest Hewlett-Packard (NYSE: HPQ) Deal Disaster

By , Money Morning -

Computer maker Hewlett-Packard Co. (NYSE: HPQ) reported fourth-quarter earnings yesterday (Tuesday), surprising the market with an $8.8 billion charge against its acquisition of British software company Autonomy.

HP alleges that $5 billion of the charge is related to fraud and misrepresentation by Autonomy management prior to the acquisition, a charge that former Autonomy CEO Mike Lynch vehemently denies.

This is the second multi-billion dollar charge to earnings resulting from an acquisition in as many quarters. In the third quarter, Hewlett-Packard took a nearly $11 billion charge on its acquisition of Electronic Data Systems (EDS), which failed to perform up to expectations.

Hewlett-Packard acquired Autonomy in the summer of 2011 as part of former CEO Leo Apotheker's strategy to move HP away from its reliance on computer hardware and increase revenue from the sale of high value-added software. Apotheker was forced out of Hewlett-Packard only three weeks after Autonomy was acquired and HP's new CEO, Meg Whitman, has put less emphasis on the software side of the business as she tackles the much bigger problem of restructuring the company's product lineup and its global strategy.

During Tuesday's conference call, Whitman talked about Autonomy, saying, "The majority of this impairment charge is linked to serious accounting improprieties, disclosure failures and outright misrepresentations that occurred prior to HP's acquisition of Autonomy and the associated impact on the expected financial performance of the business over the long term."

"These improprieties were discovered through an internal investigation after a senior member of Autonomy's leadership team came forward following the departure of Mike Lynch on May 23. Based on this information, HP initiated an intense internal investigation into the allegations, including a third-party forensic review of Autonomy's historical financial results."

Whitman concluded, "HP has contacted the SEC's enforcement division and the U.K.'s Serious Fraud Office. We have requested that both agencies open criminal and civil investigations into this matter. In addition, HP intends to seek redress against various parties in the appropriate civil courts to recoup what we can for our shareholders."



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The Bright Future for Cloud Computing is Becoming Much Clearer

By , Money Morning -

The cloud computing industry has yet to fully take off, but for an indication of its potential, look at the players getting involved.

Microsoft Corp. (Nasdaq: MSFT), Hewlett-Packard Co. (NYSE: HPQ), Oracle Corp. (Nasdaq: ORCL), Google Inc. (Nasdaq: GOOG), and Amazon.com Inc. (Nasdaq: AMZN) - the biggest names in the tech sector - are all racing to take the lead in this burgeoning industry.

So what's all of the excitement about?

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Hot Stocks: Hewlett-Packard Continues its Business Makeover with ArcSight Acquisition

By , Contributing Writer, Money Morning -

Hewlett-Packard Co. (Nasdaq: HPQ) yesterday (Monday) took another step toward becoming a more diverse software-based company by agreeing to buy ArcSight Inc. (Nasdaq: ARST) for about $1.5 billion in cash.

Palo Alto, California-based H-P will pay ArcSight investors $43.50 a share, a 24% premium over the stock's closing price on Sept. 10. ArcSight makes security software to help companies identify suspicious activity on their corporate networks.

The deal is the latest in a string of acquisitions designed by H-P to lower its reliance on lower-margin computers and servers.

"HP wants to expand from their traditional hardware offerings -- printers and computers and servers -- and they've gone into more services and software," Dave Novosel, an analyst at corporate-bond research firm Gimme Credit in Chicago, told Bloomberg News. "This is something that's a little bit different for H-P. This is not where they've had a strength in the past."

H-P in April kicked off the spending spree by buying 3COM for $2.7 billion and smartphone-maker Palm Inc. for $1.2 billion. H-P also acquired Fortify Software Inc., another security firm, and Stratavia Inc., a database and application automation company based in Denver. Terms for those purchases weren't disclosed.

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HP, Dell Land In Pricey Bidding War as Tech Sector M&A Heats Up

By , Associate Editor, Money Morning -

A rare technology sector bidding war raged on late Tuesday as data storage company 3Par Inc. (NYSE: PAR) announced it would start merger talks with Hewlett-Packard Co. (NYSE: HPQ), pressuring rival Dell Inc. (Nasdaq: DELL) to make another bid to win the key growth opportunity into enterprise storage business.

In a Securities and Exchange Commission (SEC) filing late Tuesday, 3Par wrote that HP's $1.6 billion offer was "reasonably likely" to win support from its board. HP announced the $24 per share bid Monday, topping Dell's Aug. 16 offer of $1.15 billion, or $18 a share, by 33%.

The steep price increase comes at a time when tech companies are vying to acquire businesses that broaden their product offerings, and tech powerhouses are quickly snatching up quality companies.

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HP Shakes Up Smartphone Market With $1.2 Billion Palm Buyout

By , Contributing Writer, Money Morning -

Hewlett-Packard Co. (NYSE: HPQ) today (Thursday) bought Palm Inc. (Nasdaq: PALM) in a $1.2 billion deal that marks a giant step by the computer firm into the burgeoning smartphone market and brings to a close speculation about a struggling company that was running out of options.

The deal will catapult H-P, the world's largest tech company in terms of revenue, into direct competition with a handful of other tech giants - including Apple Inc. (Nasdaq: AAPL), Google (Nasdaq: GOOG) and Microsoft (NYSE: MSFT) - in the rapidly growing smartphone market.

H-P said it would pay $5.70 a share in cash for Palm, representing a 23% premium over its Wednesday closing price.

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Hot Stocks: The iPad Proves It's Not What Apple Sells, It's How Apple Sells It

By , Associate Editor, Money Morning -

Apple Inc.'s (Nasdaq: AAPL) iPad has lived up to the hype, garnering rave reviews and meeting sales expectations. That success is particularly impressive because previous attempts by other companies to launch similar products were met with abject failure.

Because they make up less than 1% of the personal-computer market, few observers realize that so-called tablets have been around for about twenty years now.

The first models offered detachable keyboards, pen-based applications, and were priced in the thousands. A few contributed to companies declaring bankruptcy shortly after their debuts. Most were as pricey as a laptop but without nearly as much memory or competitive features - "underpowered and overpriced" were the usual complaints.

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Investment News Briefs

By , Money Morning -

With our investment news briefs, Money Morning provides investors with a quick overview of the most important investing news stories from all around the world. B&D Raised 3Q Outlook; Barrick Buys Controlling Stake in Xstrata Mine; Soros Invests $1.1 Billion in Clean Energy Reform; Blackstone Prepping IPOs; Philips Electronics Profits While Sales Fall; China Raising […]

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Dell Looks to Services in Perot Acquisition to Pick Up Slack for Slow PC Sales

By , Money Morning -

Dell Inc.'s (Nasdaq: DELL) agreement to buy information technology service provider Perot Systems Corp. (NYSE: PER) yesterday (Monday) signals a sign of the times as computer makers branch out from their core businesses into the lucrative services sector. The acquisition, which is valued at $3.9 billion, or $30 per share, represents a 68% premium to […]

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Hot Stocks: Oracle's Future Clouded by Sun Takeover Complications

By , Money Morning -

Despite earlier this week announcing disappointing first-quarter results, Oracle Corp. (Nasdaq: ORCL) says it expects its second quarter will be stronger. However, many analysts are skeptical, as the company’s attempted takeover of Sun Microsystems Inc. (Nasdaq: JAVA) has not gone as smoothly as planned. Oracle reported revenue for the three months ended Aug. 31 fell […]

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