HPaQ gets thumbs up from Saudi billionaire Prince
An investor who's no stranger to losing money
Royal dotcom stock splurger Prince Alwaleed Bin Talal has said he's right behind Hewlett-Packard's takeover of Compaq. He thinks it's all a great idea.
Prince Alwaleed says he owns one per cent of Compaq's stock, and doesn't seem perturbed by both company's share drop since the deal was announced. But then he is no stranger to pissing his money away - he laughed off seeing his $80 million investment in Priceline.com go down the toilet back in November 2000.
But then he's worth $20 billion, so easy come easy go.
HP's stock price is down 22 per cent, and Compaq's 21 per cent, since the takeover was announced.
The prince has been chatting to Compaq CEO Michael Capellas according to Bloomberg, and has made the following statement. "I am confident that under the leadership of Ms. Fiorina and Mr. Capellas, the new company will be stronger, leaner and more efficient."
Other investors don't feel the same. A US value-investment fund which owns shares in both businesses, Matrix Asset Advisors, has sent a letter to the boards of HP and Compaq asking them to rethink the deal.
On Tuesday 23 October Compaq revealed it had been hit with a hefty Q3 loss, and said Q4 will be equally bad. The computer giant posted a net loss of $499 million, compared with a profit of $557 million in Q3 2000. It took a $379 million spanking on its investment in Internet incubator CMGI, so lost $120 million by itself. Sales fell 33 per cent to $7.48 billion, below analysts' expectations of $7.53 billion.
Prince Alwaleed Bin Talal raised his investment in AOL to $2 billion back in November 2000. ®