Hewelett-Packard is no longer the powerhouse it used to be. Hearing HP brings to mind clunky late 90's computers. They've definitely lost ground to other companies. Splitting HP into two companies -hardware and technology - might bring it back to relevancy, encourage growth, and add more value to its stock.
The only winners out of this are the executives sitting on both boards.
HP Enterprise will drop at the split HP Inc will soar, briefly then be bought out by a Chinese company. Probably for a under valued figure.
More jobs will be lost and both companies will suffer in the long run.
Hewlett-Packard split is a shocking and tough situation for the long-term investors. Such measures usually signal for deeper issues and are always accepted as negative share price affecting news. Hewlett-Packard has lost momentum in recent years and, on the contrary, the competition has gained new market share through more innovative solutions. It`s doubtful that in long-term investors will receive higher value for their shares. While further revenue dip can unlock an easy closed down for the worse division of the split Hewlett-Packer entities.
Hewlett-Packard is a large-scale company that produces a vast array of mostly electronic goods, which can be roughly divided into two categories: consumer electronic goods such as computers and computer accessories, and more technical equipment for use by engineers and technical designers, the names of which aren't even comprehensible to the average consumer. That said, these two types of products are not unrelated: much of the technical equipment produced by HP is of the type used by engineers and designers during the development of consumer electronics. Hence, it makes sense to keep the production of these two types of products under the same roof. Since HP's production of consumer goods utilizes much of the technical equipment that they also use, they are in a good position to judge how best to design and produce this technical equipment. HP thus gets double the use out of its technical resources and human capital. To split this up would be to decrease the efficiency of the company.
HP is known as just that...HP. I would argue that a large part of the companies value and profitability lies in customer awareness of the brand. Such an upheaval would require the companies to do a lot of work in marketing and advertising and in the area of innovation. That seems like a bit too much. There is definitely a way to keep the company together and unlock value for shareholders.