HP Brings on Goldman Sachs to Fend Off Shareholder Activism: WSJ

By Erin Harrison September 29, 2011

In an effort to fend off so-called activist investors, Hewlett-Packard is ramping up its defenses by hiring banking giant Goldman Sachs to help devise a strategy against potential shareholder “activism,” according to media reports.

Activist investors with enough shares could demand drastic changes at the company, the Wall Street Journal reported this week.

“HP has felt vulnerable to possible activist investor pressure amid questions about the company’s performance and strategic direction, the people said. The concerns intensified earlier this month when Leo Apotheker was ousted as chief executive and replaced by Meg Whitman,” the Journal said, citing people “familiar with the matter” who were not named in the report.

Asked about the report, an HP spokesman said the company “has long-term relationships with a large number of investment banks,” according to the Journal.

On Sept. 22, after only 11 months on the job, the board of directors of Hewlett-Packard replaced troubled CEO Leo Apotheker with former eBay CEO and California candidate for governor Meg Whitman, TechZone360’s Peter Bernstein reported.

However, instead of doing the obvious, i.e., announcing that the board was replacing Apotheker with Whitman, the board let the change become a rumor and then let the rumor linger. TMC CEO Rich Tehrani is giving Whitman 12 months in the job at best.

Adding insult to injury, previous to the leadership change announced last week, shares of HP plummeted after the company announced many stunning changes in August – including that it may spin off its PC business. PC sales represent about one-third of HP’s business, TechZone360 reported.

HP’s stock dropped nearly $7 on Aug. 19, some 23 percent, to about $23 a share, according to news reports. The stock fell 15 percent in pre-market trading. MarketWatch said HP stock has dropped 30 percent during 2011.

Apotheker was named CEO last year. A European and a company “outsider” – rather than someone who had roots in Silicon Valley – Apotheker’s selection came as a surprise to several analysts, TechZone360 reported.




Erin Harrison is Executive Editor, Strategic Initiatives, for TMC, where she oversees the company's strategic editorial initiatives, including the launch of several new print and online initiatives. She plays an active role in the print publications and TechZone360, covering IP communications, information technology and other related topics. To read more of Erin's articles, please visit her columnist page.

Edited by Jennifer Russell

Executive Editor, Strategic Initiatives

SHARE THIS ARTICLE
Related Articles

Is 5G a Spectrum-eating Monster that Destroys Competition?

By: Fred Goldstein    6/15/2018

To hear the current FCC talk about it, 5G mobile service is the be-all and end-all of not only mobile communications, but the answer to most of the co…

Read More

FX Group Makes the Red Carpet Shoppable with Blockchain-Based mCart Marketplace-as-a-Service

By: TMCnet News    6/14/2018

mCart by Mavatar announces the launch of the world's first blockchain-based decentralized mCart marketplace by the FX Group.

Read More

Judge Gives AT&T-Time Warner Deal Green Light

By: Paula Bernier    6/12/2018

Federal judge Richard Leon gave the $85 billion deal the green light today - and without any requirements to sell off any parts of the company. He als…

Read More

A New Foundation for Evolving Blockchain As a Fundamental Network Technology

By: Arti Loftus    6/12/2018

There are now thousands of blockchains, and unless you are a cryptophile, you won't recognize most of them.

Read More