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The American technology giant, which is engaged in a high-profile battle over Autonomy, the British software firm it bought for $10bn last year, is now worth $27.2bn compared with more than $100bn as recently as 2011. Its shares have been hit by a string of multi-billion dollar writedowns, and apparent indecision over its strategy. Investors have also expressed alarm over the high price that HP has been willing to pay for a number of acquisitions.
However, the latest major blow came earlier this month when HP accused Autonomy, a software business specialising in searching “unstructured data" such as texts, voicemails and videos, of using serious accounting improprieties to wilfully misrepresent its business. Autonomy’s founder, Mike Lynch, denies the allegations, which HP made in filings to America’s Securities and Exchange Commission, as it made another writedown of $8.8bn.
Shareholders have also been severely rattled by HP’s suggestion last year that, after piling investment into buying up computer companies like Compaq, it should give up making PCs altogether. HP was the largest PC manufacturer in the world until earlier this year, when it was overtaken by China’s Lenovo.
Michael Mullaney, chief investment officer at Fiduciary Trust, told Bloomberg: “It’s absolutely dirt cheap. If they want to try to fix [the situation] immediately, it would be by splitting up the company. That’s exactly what they have to do.”
“The company is probably worth twice its current share price on a conservative appraisal of its sum-of-parts breakup scenario,” added Todd Lowenstein, an investment manager at HighMark Capital Management in Los Angeles.
HP said it has no plans to change its current structure.