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It is all very fine for a company to restructure its business when things are going well. But when the company is struggling, investors yelp.

Such is the case with Hewlett-Packard Co. on Friday morning after the struggling computer maker made a flurry of big announcements for investors to digest. The result: HP shares slumped 21 per cent, taking them to a six-year low.

The company said that it would consider strategic alternatives to its PC business, suggesting that the division could be either hived off as a separate company or sold – a clear admission that the business is having a tough time competing amid a general deterioration in the industry and the rise of the tablet computer and smart phone as computer alternatives. And as for that HP tablet computer, the TouchPad, production is being halted.

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Then there is the problem with earnings: HP lowered its guidance for the current quarter. "These challenges and the transformation we are undertaking will take several quarters to fully resolve," the company's chief executive said. "I don't take this action lightly. I know our investors don't like being in this position, and neither do I."

And just to make things even more complicated for investors, HP announced that it would pay more than $10-billion (U.S.) for Autonomy Corp., a U.K.-based data-search firm. Some observers have expressed concern over the price tag.

The reaction to these moves extends beyond the stock market, which has cut the value of the company in half since February. Analysts were, for the most part, quick to express their dismay. According to Bloomberg News, the vast majority of the 24 analysts who have weighed in on Friday cut their target prices on the stock – some dramatically.

For example, Deutsche Bank cut its recommendation to "sell" from "hold" and reduced its target price to $20 from $36. Needham & Co. cut its recommendation to "underperform" from "buy". And Robert W. Baird & Co. cut its recommendation to "neutral" from "outperform" and reduced its target to $30 from $51.

The Wall Street Journal had a nice roundup of some of the comments from analysts.

Richard Kugele from Needham: "H-P may have eroded what remained of Wall Street's confidence in the company and its strategy," said Mr. Kugele, who downgraded the stock to underperform. "We can't help but get the sense that these dramatic moves are being made from a position of weakness and not strength, and have an air of desperation to them."

Katy Huberty from Morgan Stanley: "H-P is better served looking for strategic alternatives for the low margin PC business and refocusing its efforts on the enterprise. However, several concerns will make it difficult for the stock to work in the near-term."

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Kevin Hunt from Auriga: "Avoid the value trap."

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