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Hewlett Packard Leaks Good News Early, To Mask Bad News Later

Tyler Durden's picture





 

And so, on a day when the market is plunging, and any piece of good news is desperately needed, Hewlett Packard shows all the amateur PR hacks how it's done. With less than 5 hours until the company's official earnings release, Hewlett Packard just leaked to by Bloomberg that it would spin off its PC business and purchase British software developer Autonomy PLC. This is the oldest trick in the book to get a stock to drop from a higher level in the hopes that staggered releases of news, first good, then bad offsets each other, instead of having the good news be overwhelmed by the bad. Either way, stock surged following the mandatory robotic response and after triggering circuit breakers was halted, only to resume trading 7% higher. We very much doubt this surge will sustain itself for more than a few minutes after the scam is understood. We also very much doubt that today's earnings release will have anything good to say about the future.

From Bloomberg:

Hewlett-Packard Co. (HPQ), the world’s largest computer maker, is planning to announce the acquisition of Autonomy Corp. for about $10 billion and the spinoff of its personal-computer business, said people familiar with the company’s plans.

The company may announce its plans as early as today, said the people, who asked not to be identified because the plans aren’t yet public. Hewlett-Packard, based in Palo Alto, California, is scheduled to report quarterly earnings today after markets close.

Stock response:

Update: sure enough...

Second and final update: pretty much unchanged.

 


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Thu, 08/18/2011 - 12:27 | Link to Comment Id fight Gandhi
Id fight Gandhi's picture

Ride it down

Thu, 08/18/2011 - 12:31 | Link to Comment SheepDog-One
SheepDog-One's picture

Awesome pop to sell.

Thu, 08/18/2011 - 12:36 | Link to Comment Stoploss
Stoploss's picture

You can see the selling into the pop on the volume line. Tomorrow? Just flip the chart!!

Thu, 08/18/2011 - 13:06 | Link to Comment Stoploss
Stoploss's picture

As usual, once this article was read, HP has now given back all of those gains.  LOL!!!!

Thu, 08/18/2011 - 12:31 | Link to Comment Version 7
Version 7's picture

The time a surge sustains is usually until a ZH post.

Thu, 08/18/2011 - 12:34 | Link to Comment topcallingtroll
topcallingtroll's picture

You make it sound like the game is rigged, somehow.

Thu, 08/18/2011 - 12:36 | Link to Comment TruthInSunshine
TruthInSunshine's picture

HP says:

The future is so bright we're going to sell our core business:  Making Shit (in this case, PCs).

 

Yeahhhhh, baby!!!

Thu, 08/18/2011 - 12:44 | Link to Comment wang (not verified)
Thu, 08/18/2011 - 13:14 | Link to Comment John Law Lives
John Law Lives's picture

All in the name of corporate profits with ZERO regard for American workers.

Thu, 08/18/2011 - 12:37 | Link to Comment drink or die
drink or die's picture

How can you charge $40 for an ink cartridge and STILL have a bad earnings release???

Thu, 08/18/2011 - 12:46 | Link to Comment MachoMan
MachoMan's picture

Because people are wising up? 

Went with a laser printer and have never looked back...  completely ace and, now, the same price as comparable ink jets...  blows em out of the water....

Thu, 08/18/2011 - 14:55 | Link to Comment pods
pods's picture

Have to check that out.  I went with no name refills on my inkjet, like $8 bucks for black, a bit more for color.

The days of selling ink and giving away inkjets is over.

pods

Fri, 08/19/2011 - 10:26 | Link to Comment MachoMan
MachoMan's picture

Check out some of brother's offerings...  that accept the tn360 cartridge (routinely on sale for cheap as hell)...  if you go the laser jet route, look at who has the cheapest/most prolific refils and find a printer that accepts them ;)

Although, depending on your price point, you might have to look at how expensive the drum unit is to replace...  some of them are cost prohibitive (i.e. you can get a new printer with new toner and a new drum for $150 or a replacement drum for $75...  or something like that).  If so, sell the old one and rock on.  Cheaper/easier/faster print solution.

 

Thu, 08/18/2011 - 13:02 | Link to Comment FeralSerf
FeralSerf's picture

If you charge too much, and they do, it just causes lots of cheap competition, and it has.  Copies of that ink cartridge are around $10.   HP gets nothing.  If they had charged $20, they would have got something.  This is after they sold the printer at a loss using the Gillette business model.

Thu, 08/18/2011 - 12:38 | Link to Comment JohnnyR2121
JohnnyR2121's picture

Good news early? How is paying $10b for and a million times PE for an average software maker good news? And who's going to pay anything above 5x for a crappy computer division? Even if they get money for it the cash will be wasted on things that keep the corporate elites at HP in power.

 

Earnings = money to be wasted on high PE acqusitions. Price / waste ratio is a reason to sell stocks. 

Thu, 08/18/2011 - 12:38 | Link to Comment Robslob
Robslob's picture

This is to shed the stink of Dell earnings before their own...no?

Thu, 08/18/2011 - 12:41 | Link to Comment The Axe
The Axe's picture

Tyler..you a genius.....great call  thanks   quick vert spread....

Thu, 08/18/2011 - 12:49 | Link to Comment buzzsaw99
buzzsaw99's picture

"spin off" is vague. to whom? for how much? Also, acquisitions usually drive down the stock of the acquiring compnay. Bogus x 100.

Thu, 08/18/2011 - 13:04 | Link to Comment poor fella
poor fella's picture

Not going to help UK's unemployment rate when HP up and plops a cube farm in Brazil with a hand carved sign, "Autonomi PLc".

Thu, 08/18/2011 - 13:08 | Link to Comment John Law Lives
John Law Lives's picture

So, HP wants to shed its "PC" business.  I wonder where they will draw the line between a "PC" and a "Server" to decide what they will keep and what they will shed.  I would be shocked if HP sold its "Enterpriser Server" group along with its "PC" group.

Thu, 08/18/2011 - 13:12 | Link to Comment user2011
user2011's picture

If my put options pays off.... donation to ZH is a must !!

Fri, 08/19/2011 - 17:20 | Link to Comment lincfucious
lincfucious's picture

You must be smiling all the way to the bank today.

Thu, 08/18/2011 - 13:46 | Link to Comment firstdivision
firstdivision's picture

LOL! The stock should have moved down with that announcement in that they are selling their hardware business to spend all that money and then some to acquire another company that does only 1's and 0's. So much to tangible products, guess Apple is doing it wrong.

Thu, 08/18/2011 - 14:14 | Link to Comment yj000
yj000's picture

This is what happens when you appoint a CEO from a software company to a hardware company. Leo Idiothaker has no clue how to run HP's PC business, so he's decided to spin it off and turn HP into another crappy software company by blowing off most of its cash for a software company nobody has ever heard of.

Please name ONE software product HP makes.. ONE.
You can't.
look at the latest HP acquisitions:
Palm = total failure
Arcsight = ?? never heard of them
Fortify =?? never heard of them.
The last two companies mentioned were computer security software companies. Unfortunately it appears their products are not very good, otherwise you wouldn't have massive security breaches at Sony, DoD, etc etc

I've dealt with HP's server and storage line for 7 years and i can truly tell you, that software is not HP's strong point.
Leo Idiothaker is literally killing HP by turning it into a software company.
start shorting whatever is left of HPQ

Thu, 08/18/2011 - 14:58 | Link to Comment combatsnoopy
combatsnoopy's picture

their hardware is not their strong point either.  I had to return TWO printers because they were total garbage.  Brand new.  It ate up a lot of ink on the day of purchase to figure that out.  I guess their offshore model doesn't guarentee  a quality product. 

Thu, 08/18/2011 - 16:27 | Link to Comment karzai_luver
karzai_luver's picture

god all mighty what a trail of tears!

 

Is this guy trying to kill the co?

 

hahaha

 

 

 

Another great executive, where do they find them!

 

 

Thu, 08/18/2011 - 14:15 | Link to Comment carbonmutant
carbonmutant's picture

HP has screwed a lot of it's employees over the years...

It truly deserves this.

Thu, 08/18/2011 - 15:02 | Link to Comment AlaricBalth
AlaricBalth's picture

HPQ shares halted trading

Thu, 08/18/2011 - 15:02 | Link to Comment AlaricBalth
AlaricBalth's picture

edit

Thu, 08/18/2011 - 15:21 | Link to Comment adr
adr's picture

You used to get 40ml of ink for $20 and now you get 9ml for $35. They claim their printers are more efficient and use less ink to print a page, nope. Just blatant ass rape plain and simple.

I still have an 850c from 1996 that still works and you can still buy the HP 45 cartridge for $15 that lasts for over 500 pages. Ahh the good ol days when HP made bulletproof stuff. Sadly the printer is only good for black really and won't work with Vista or Win 7.

I blew off HP after they obsoleted my $1200 professional scanner by not releasing drivers for Vista and Win7. Hopefully the turd of a company will drop dead very soon.

Thu, 08/18/2011 - 18:45 | Link to Comment theprofromdover
theprofromdover's picture

HP -dead man walking for at least a decade,

(when their philosophy changed to deciding the customer was an enemy to be fleeced)

(when they got so envious of Microsoft's bare-faced greed and decided imitation was the sincerest form of flattery)

Selling printers with incompatible cartridges, selling ink bottles with nothing but vapour in them; introducing snoop software; refusing to upgrade drivers to new windows; silly specs for notebooks, handhelds, PCs.............

RIP soon I hope, you won't be missed. Going the way of all your predecessors (how come IBM still exists?)

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