link here to article
Hewlett Packard (HP) is the world's largest computer company. Its stock price fell 20% yesterday after announcing that earnings per share for the year would be 16% less than it had forecast earlier in the year.
This article is also about how HP attempted to manage the bad news. It announced an acquisition of a UK software firm which boosted to stock price ahead of the bad earnings announcement. The stock price rose after the acquisition announcement. The next day it lost all of the gain plus the 20% drop from its price prior to any announcement.
Investors were disappointed by the lowered earnings announcement but they were further concerned with HP's plan to spend $10 billion on an acquisition while also announcing that it was looking to sell its PC division which has low profit margins. HP had made a huge investment in the PC business when it purchased Compaq. The Compaq acquisition was contentious at that time. Founders of the company, on the Board of Directors, were unable to stop the acquisition. By announcing the intention to sell the PC unit, they have confirmed the concerns of its founders. IBM sold its PC business for similar reasons to Lenova. I wonder who will be interested in purchasing HP's PC business.