A Dead Company

HPQ showed its wild side again. This time, again and again, appeared on its CEO. A memo on HP's outlook was leaked before original scheduled date. The memo was reportedly only sent to 10 highest ranked executives. Because of the dim projection, stock price slammed. Also because of wild speculation, HP moved their earnings announcement forward. That is a really mess.

Actually before price plummet, HPQ was riding upward. Obviously, the ones who enjoyed leaked information also speculated it, both up and down. Consider such highly confidential commercial information, or even illegal inside trading involved, we can see how loosely managed at HPQ. It is easy to trace the memo if it was only meant to the 10 executives. Where did it leak? There are many indicators HPQ is dead to investors.

First, speculators have an internal loop. Regular investors would be consumed without mercy. So keep a long distance from it. Second, the company is illed managed. If the new CEO can't discipline his subordinates, there is no way preventing such things from repeating in the future. There may be huge attrition at the high up. Third, this track record shows that HPQ's cruel politics culture. Such politics could distract concentration and consume power. For instance, acquisitions of Palm and 3Par didn't make any good to HPQ. These are foremost considerations for investors.

Interestingly enough, after price dropped almost 10%, some analysts proposed "it is finally cheap". Watch out.

Long established companies like HPQ can't innovate itself in meaningful way, the only way is constructive destruction, one of the most powerful mechanism in capitalism system, according to Alan Greenspan.

HPQ should be removed from all watchlists.