HP CEO Ouster Triggers Rise in Shares?
Reports about HP CEO Leo Apotheker nearing his premature ouster seemed to have sent HP shares climbing on Wall Street Wednesday.
The HP CEO, hired 11 months ago, is rumored to be on his way out of the tech company while the HP board is considering Meg Whitman, former head of eBay, to replace him. Whitman was in San Jose Tuesday to hand over the $2.5 million gift from the Whitman-Harsh Family Foundation to help the Summit Public Schools.
HP shares were up 6.72 percent to close at $23.98.
Rumors had it that Apotheker will be forced to leave the company as the board considers his “series of management mishaps” intolerable.
Since he took over the top position, Apotheker has been under pressure for what the board considers as disappointing quarters during his leadership and the ballooning perception that he has no 20/20 vision for the company.
“Léo is driving a very tough and aggressive transition for H-P. It has frustrated many investors. I am not surprised at the rumors,” IDC analyst Crawford Del Prete told MarketWatch newswire.
Although many in the tech world vehemently mock the idea of hiring Whitman as HP CEO, some even calling it crazy, Dow Jones-owned news site AllThingsD cautioned that Whitman’s appointment to head the Palo Alto, California-based company “is by no means a done deal.”
The HP board met on Wednesday to consider the ouster of Apotheker amid shareholder lawsuits and intense criticism from investors.
HP shifted its focus to software and cloud services when Apotheker, former CEO of German business software giant SAP, took over the company in November. Since then, HP shares plummeted by more than 40 percent.
In August, HP shares declined 20 percent on a single day when Apotheker declared a spin-off with its PC business, one of the dramatic strategic changes in the company that were said to have dragged HP to where it is now.
HP also recently announced that it would stop the production of its TouchPad tablet computer, the rival of Apple’s iPad, and phones based on the webOS mobile operating system acquired from Palm last year in a $1.2 billion deal.
On Tuesday, some employees were already declared redundant.
Meanwhile, Apotheker and chief financial officer Catherine Lesjak are facing a lawsuit filed by an HP shareholder last week charging HP executives with painting the company’s gloomy prospect with deceptive picture.