Investors clearly love the speculation that Hewlett-Packard Co.’s chief executive might be ousted by the company’s board of directors: The shares jumped more than 10 per cent on Wednesday afternoon, with some reports suggesting that the board is thinking about appointing former EBay Inc. chief executive Meg Whitman as his replacement.
As Bloomberg News reported, HP’s current CEO, Leo Apotheker, has been on the job just 11 months, and has made some unpopular moves during that brief time. In his attempt to overhaul HP, he pulled the plug on its tablet device, considered spinning off its personal computer division and agreed to pay $10.3-billion (U.S.) for Autonomy Corp., with many critics saying that he overpaid for the U.K. company.
But the biggest criticism against Mr. Apotheker is HP’s share price performance during his leadership: It fell 47 per cent before Wednesday’s rally, which is more than enough to rankle just about anyone.
However, you do have to wonder whether his departure would bring significant improvement to the company. The shares were already in decline before his appointment last September, falling 23 per cent over the previous six months. The dismal economy has been weighing on computer sales, while a number of companies have struggled to deliver a meaningful competitor to Apple Inc.’s iPad – seen by some as a PC killer.
Consider that while HP shares have tumbled 47 per cent over the past 11 months, Research In Motion Ltd. – which is up against the Apple iPhone – has slumped more than 50 per cent in New York. Then again, some investors have been clamouring for a management shakeup at RIM, too.