Company Gains $3 Billion on Paper in One Day
HP shares jumped 7 percent on Sept. 21 to a shade under $24 on the initial report by Bloomberg News that Apotheker might be replaced. Wall Street analysts estimated that the one-day surge added $3 billion to the value of the company.
Apotheker, a former chief executive of German software manufacturer SAP, was announced on Sept. 30, 2010
to replace another ousted HP CEO, Mark Hurd, who had become enmeshed in an internal administrative snafu and a sexual-harassment lawsuit brought by a female contractor.
A month to the day after his ouster, Hurd moved to HP competitor Oracle on Sept. 6, 2010, where he became co-president of the company under longtime friend and ally Larry Ellison.
Apotheker had a 20-plus-year career with SAP in several positions before being named sole CEO in May 2009 after serving as co-CEO with Henning Kagermann for one year. He resigned under pressure in February 2010
after SAP earnings reports slumped on his watch during the macroeconomic crisis of that time.
The HP board, which has often absorbed flak from shareholders, analysts and former board members ever since it broke ties with the Hewlett and Packard families 10 years ago during the Compaq acquisition, is getting close scrutiny again as a result of a solid 12 months of problems.
There's more intrigue. A report in The New York Times
late Sept. 21 detailed the recruitment of Apotheker
and contended that most of the board members never even met Apotheker before he was hired-as unbelievable as that sounds.
"The board has to have some level of culpability here," longtime IT industry analyst Steve Duplessie of Enterprise Strategy Group told eWEEK.
"They picked him. They let him publicly say he was getting rid of the PC business-which effectively gives HP buying power across their entire spectrum of offerings-then backpedal all over the place.
"An interim CEO ... will do nothing other than calm things down and slow things down, and then after a much-thought-out search, we'll have a new chief. That interim CEO ought to publicly declare that the PC business is absolutely not for sale [even if it is], stem the tide of customer defections and shore up market sentiment," Duplessie said. "In short, the next CEO will have to be a much better public relations person than Leo. His strategy may prove to be correct, but his communications skills will not. On a positive note, it seems startups and smaller companies can sleep better knowing even the big dogs are all screwed up, too, sometimes."