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HP to split in twain – WSJ

Stresses Internet hardware sales

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Hewlett-Packard is preparing to split itself into two separate companies, according to a good old-fashioned scoop in today's Wall Street Journal. The computer giant will make the announcement after the NYSE this evening, the paper reports. HP management recently hired posh management consultants McKinsey & Co to investigate "strategic alternatives", the WSJ reveals. HP shares have performed like dogs over the last two years, according to the paper -- it cites research company Baseline figures, showing HP share value has grown 17 per cent during this period, compared with 56 per cent for the S&P Index, and 137 per cent for an index of computer hardware How will the cookie crumble at HP post-reorganisation? The most obvious way to carve up the group would be to hive off the companies test and measurement and medical equipment, which collectively represents 11 per cent of sales. But that would not require expensive management consultants to come up with such an idea. The Register could have given that one away for free. It's difficult to see how such a demerger would unlock value in the company's core computer business, which represents 89 per cent of turnover. The WSJ quotes a "person close to the company (who predicts) HP will try to stress faster-growing Internet-related hardware, that could command a premium on Wall Street". HP shares will no doubt jump today and tomorrow. Aren't smoke and mirrors wonderful things? ®

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