Word: hp
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Dates: during 2000-2009
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...public backbiting like this at every company. Then again, not every company has a legacy like HP's. Both Hewlett and Fiorina have staked their claim to what the founders dubbed "the HP way," a phrase that at first embodied the ideals of innovation and good corporate citizenship but has come to mean many things to many people over the past 60 years. Now two polar-opposite visions of the company's destiny--indeed, of how best to survive in today's rough-and-tumble tech economy--have taken shape. When the smoke clears, there will be only one HP...
...Fiorina's future, HP follows the mantras of the dotcom era: get big fast and diversify, keeping your fingers in as many pies as possible (in this case, the PC business, the server business, the consultancy business, and printing and imaging). Hewlett's vision is more classic and conservative: avoid spreading your resources too widely, and focus on what you do best--and what you're known for. In HP's case, that's printing and imaging. Hewlett would have HP ditch most of its low-margin PC business. Until recently, Wall Street seemed to be in lockstep with Hewlett...
...Kumar, senior analyst for Institutional Shareholder Services, who has heard the stump speeches of both sides. "We try to confine ourselves to logic." Kumar's rationale counts more than most. Next week the influential ISS will mail a widely awaited report to pension funds and other big holders of HP stock. Because the family foundations opposing the merger control 19% of HP shares, Fiorina needs around two-thirds of institutional investors on her side...
...which way is Kumar's logic leaning? He won't say, but the wind may have started to turn in Fiorina's favor. In HP's latest earnings announcement, quarterly profit was a whopping three times last year's level, thanks largely to strong Christmas sales of cameras and printers. Hewlett seized upon that, saying it showed how well HP can do on its own, but others were pleasantly surprised--and more inclined to give Fiorina the benefit of the doubt...
...wouldn't say she's got the Big Mo, but there's clearly a change in investors' willingness to view the merits of the deal," says Joel Wagon-feld, research analyst at Banc of America Securities, which had previously been skeptical of the merger. Indeed, the gap between what HP wants to pay for Compaq shares and how the market values them--a key measure of merger confidence, called the arbitrage spread--has narrowed from a toxic $4.35 in November to $1.70. In another tacit sign of support, the company's top five shareholders have been quietly adding to their...