Shares of troubled technology giant
Hewlett-Packard were sharply lower Friday in what analysts said was a
vote of no-confidence in the company's decision to appoint Meg
Whitman as CEO.
The company, which is among the largest tech firms in the world, announced the appointment of the former eBay boss on Thursday. Whitman, 55, is replacing Leo Apotheker, 58, whose stint at the company was cut short after only 11 turbulent months in charge.
Whitman and HP chairman Ray Lane said that the company remained committed to the turnaround strategy outlined by Apotheker, who previously was the CEO of German software giant SAP.
The strategy involves moving the world's largest manufacturer of PC's into higher margin businesses like software and services to other large enterprises. To this end HP is buying the British software maker Autonomy for $10 million, and is evaluating strategic alternatives for its PC unit which could be spun off or sold.
But the appointment of Whitman as the third HP CEO in a year prompted investors to question whether her experience as the head of the online retailer eBay had prepared her sufficiently to lead a vast company like HP, whose bread and butter will come from complex technology deployments at large businesses.
"While we believe the decision to replace Leo Apotheker was a good one, we are disappointed with the naming of Meg Whitman as HP's permanent CEO, and believe that this sentiment is shared by most investors and large HP shareholders," Sanford Bernstein analyst Toni Sacconaghi said Friday. "We believe the company was remiss in not conducting a comprehensive CEO search."
Such sentiments helped send HP's stock sharply down on Friday, with shares down 5 percent to their lowest level since 2005. The company's shares had jumped a similar amount on Wednesday when the first reports of Apotheker's dismissal began to circulate. But they dived on Thursday as Whitman's appointment moved closer, signaling investors' concerns.
"While we believe Meg has proven to be a very capable manager leading eBay from a startup into a household name and one of the largest internet companies, there will be plenty of scrutiny given her lack of experience in the enterprise business," Sterne Agee analyst Shaw Wu said in a note.
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