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

6 Challenges of 5G, and the 9 Pillars of Assurance Strategy

By: Special Guest    9/17/2018

To make 5G possible, everything will change. The 5G network will involve new antennas and chipsets, new architectures, new KPIs, new vendors, cloud di…

Read More

Putting the Flow into Workflow, Paessler and Briefery Help Businesses Operate Better

By: Cynthia S. Artin    9/14/2018

The digital transformation of business is generating a lot of value, through more automation, more intelligence, and ultimately more efficiency.

Read More

From Mainframe to Open Frameworks, Linux Foundation Fuels Up with Rocket Software

By: Special Guest    9/6/2018

Last week, at the Open Source Summit, hosted by The Linux Foundation, the Open Mainframe Project gave birth to Zowe, introduced a new open source soft…

Read More

Unified Office Takes a Trip to the Dentist Office

By: Cynthia S. Artin    9/6/2018

Not many of us love going to see the dentist, and one company working across unified voice, productivity and even IoT systems is out to make the exper…

Read More

AIOps Outfit Moogsoft Launches Observe

By: Paula Bernier    8/30/2018

Moogsoft Observe advances the capabilities of AIOps to help IT teams better manage their services and applications in the face of a massive proliferat…

Read More