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HP/Compaq Merger Apparently Approved
Spinality writes "Looks like HP's hotly contested merger with Compaq is going ahead. Various news headlines such as this one at Bloomberg.com report that stockholders voted to merge, against the wishes of the Hewlett and Packard families. " There isn't official word yet, but this looks like
it's pretty much a done deal. Anyone else think the business world looks like a
game of Pac Man?
I've had a lot of problems installing H-P devices. H-P has become a sloppy company, in my opinion.
I don't think Carly Fiorina is better than Lew Platt, the former CEO. It has been a long time since H-P has had a real leader.
Bush's education improvements were
Which is different from an actual tally.
Is she taking a cue from the last Pres. election and getting on the news with a fait accompli in the hopes of discouraging the last remaining mail-in proxy voters? Yes, AG did it backwards and conceded prematurely, but the media had no problem projecting before the polls closed. Lesson learned by Carly?
"As God is my witness, I thought turkeys could fly." A. Carlson
I find it disheartening that it's impossible to maintain a business with integrity and vision in the face of greed. The Hewlett family are not exactly soft, left-wing hippies; they just wanted to protect the strength of their brand.
Prepare to see the quality of HP products plummet. Prepare to see a slow death of niche imaging products.
Prepare to see layoffs of otherwise securely employed folks. Rah rah, share value.
Their network printers were so nice...
Interesting watching the share prices of HP (NYSE:HWP) and Compaq (NYSE:CPQ) - makes it clear what the markets/analysts think of this!
quick question...who else is now big in the world of retail computers...meaning like, you walk into a Best Buy or a Sears, whose computers are you gonna see??? this doesn't matter to me, cause i would personally never buy a computer from a store like that....but i'm just curious, becuase it seems like Compaq and HP were always the majority of the retail desktops out there...who is left to compete? or are they gonna have a virtual monopoly in that field???
"Facts are meaningless. You could use facts to prove anything that's even remotely true." - Homer Simpson
``A decisive majority'' of shares not affiliated with the Hewlett and Packard families voted yes, Fiorina said.
It's going to take more than just a majority of non-hewlett shares to swing this one. The Hewlett family's shares account for 18% of the company. It's going to take *61%* of the remaining 82% to make a majority of the total shares.
Actually, I don't think it's that good of a thing.
1) HP now has a wider range of products to sell with the purchase of compaq. However, the transition and management of this huge behemoth will cut into their profits. And lower profit margins means less reinvestment in the company, which will inevitably lead to less innovation.
2) HP predicts another 15,000 layoffs in the already battered tech industry as a result of this merger.
3) It is almost never a good situation to have large companies merge to create an even larger company. Another oligarchy will not be beneficial to the consumer. It will only drive up prices, create less competition, result in less innovation and produce shoddier products. These are the natural results of huge corporations grabbing more and more market place. All I need to say is AOL-Time Warner.
In any market where there is no way to grow the customer base by grabbing new blood, companies only have one way to increase their market share. Consolidation. This is what is happening and more than likely will continue.
Have you ever seen a "what's good for Pac Man is good for the game" cheat?
sPh
Now, I have to admit, I'm biased, since I work for one of the little guys, but I wouldn't work for 'em if I didn't feel strongly about it.
Say what you will about the mom and pop shops, but I've seen customer after customer come to us utterly frustrated by their experience with a name-brand pre-built. Seriously, the next computer you get, don't just waddle down to Best Buy or Sears, check out the small shops.
In my opinion, you get better value, better support, and a better warranty from the smaller companies than you do from the big ones.
Anyway, just my 2 bits.
> The official tally may take as long as six
> weeks to be completed
I agree. I also think that Fiorina has nothing to lose by trumpeting a victory prematurely. If after 6 weeks, she's proven wrong, she has a lot more things to worry about than prematurely crowing about victory.
In fact, from what I've heard, there's less than a 2 percent margin right now, which means investors are split on what to do here. That hurts the CEO's credibility in either case, which means the real winners in all of this may be Dell and IBM.
Insert simplistic political, ideological, or personal proselytization here.
I agree with Carly that HP is in need of major repair - the HP way, though laudable, represents a bygone era that simply can't be applied to modern business. That said, combining HP with another model of mediocrity, Compaq, in a hope to eek out savings-through-scale in the cut-throat, low-margin hardware business is simply not going to increase value.
These companies will spend at least two years properly integrating, during which time Dell and IBM will continue to lead, and in fact increase their leads in hardware and services. After the dust has settled on the two year merger process, the new HP will simply make its quarterly numbers by cutting staff and relying on long-term contracts in its traditional businesses....like 90% of the other mergers of the recent past.
Over the past ten years, it is surprising how few of the giant mergers have worked out well for the average shareholders, given that the motivation for these mergers is supposed to be that the combined company is worth more than the two companies individually. On the other hand, in almost all cases, a few senior executives have personally amassed large wealth.
Of course, if I could get a gig running a very large corporation where the basic contract terms were
-
Get paid $1M for running the business,
-
Get paid $10M (golden parachute) if the business is sold to another giant corporation, and
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Get paid $50M (stock options) if the stock price goes up by $20 per share even for a little while,
I suppose my behavior would be pretty predictable.Sorry, just cynical this AM.
I'm inclined to agree...
"But remember, most lynch mobs aren't this nice." (H.Simpson)
-- Joe
I suppose that depends on what you mean by "benefit". If you mean getting fired, with a super severence package, then yeah the high up execs do benefit.
I know when my company merged with another, half the execs got the axe, which makes sense (you suddenly have the double the number of execs needed at a company). The CEO of my company, prior to the merger, got the golden axe with something like $5 million to pocket. But he still got the axe.
Most high up execs, however, don't do it for the money. The money is just a score-card at that point. They do it for the power and control. So getting the axe, even with $5 million to pocket, still sucks to them.
But they live in a different world. If someone offered me $5 mil. to quit, there'd be a sonic boom created with the speed of my exit.