Hewlett's “Plan B” gains ground

Greed factor

Walter "Plan-" B Hewlett appears to be winning support for his plan for HP to abandon the Sircam merger, spin-off the printing division, and release Carly somewhere over the Himalayas.

An institutional investor, Brandes Investment Partners, likes Hewlett's "spin-off and eject" plan so much it's swinging its voting shares, 1.27 per cent of the eligible votes - against the merger.

It's more symbolic than substantial, but it is an ominous sign. If more Wall Street investors warm to the Hewlett alternative, the vote could swing decisively against Fiorina and Capellas.

Hewlett's plan is terrific, until you get to the punchline, which involves spinning off HP's printing and imaging division. This would see much of the rest of HP, which is subsidized by the printing revenue, looking highly vulnerable to dismemberment. It's hard to see its PC division lasting too long, for example.

But the Wall Street vultures, asset strippers and underwriters who filled their pockets during the bubble economy IPO mania, love a lucrative spin-off. Which is how Hewlett's plan could prove to be so cynically effective.

HP's corporate spin took a stumble last week, with a furious ad hominem attack on Walter B Hewlett's inconsistencies. This attack forgot the basic principle (in soccer, anyway) of "take out the ball, not the man".

The voters don't really care if Hewlett had a plan last week, and has one this week. They know he won't be running the company. By contrast, Hewlett's tactic of painting huge dollar signs in front of the investors' eyes appears to be one that's far more likely to win mindshare, as it appeals to pure, instinctive greed. ®

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