Wednesday, April 3, 2013

James Stewart weighs in

Last Friday's NY Times (friday March 29) carries an analysis of the recent HP Board vote, and the meaning -- CAN A BAD BOARD EVER BE THROWN OUT?

It is a solid article, with some investigative reporting, going to Vanguard and other key shareholders for info on how they voted their sizable holdings.  One gaffe -- Vanguard denied voting in any way related to possible business they do with HP, instead voting "singularly" for the shareholder.  Comments from readers picked up on this point, with pithy remarks of their own.

Stewart, who seldom pulls his punches, calls this possibly the worst board ever of a Fortune 500 company -- great lines, but this stretches both the truth and credulity just a bit.  Remember Enron?  Lehmann Brothers?  Goldman Sachs?  Even Sears, or Boeing when it was caught for massive illegalities, Lockheed in the 70's needing a bailout, GM in 2008?  How do you compare flagrant dishonesty, total crooks, and bankruptcies with the simple ineptitude and maddening emotional trauma of recent HP?

Corning, recall all those Corningware dishes and most of America's fiber optic network -- their stock for a $4B revenue company in business for 150 years went from $106 to $1.33 in a year (10/21/2001 to 10/7/2002).  No one urged throwing their board out.  Today, the stock has "recovered" to $13.30, after spending four years in the mid-20's, ending in 2009.  HP's done better.

Stewart also resurrects the Carly years, the Hurd pretexting, and the Leo hiring/firing, alongside the Autonomy deal, which he calls possibly the worst acquisition in history.  Again, methinks this is deep water -- lots of contenders over the years; AT/T w NCR, Compaq w DEC, Oracle w Sun in high tech circles; A/OL and Time/Warner; eBay with PayPal should have been made in heaven, but went awry (lessee now, who was running eBay at the time?  Oh, yes, Meg).  MCI and WorldCom?  Huge miss, and WorldCom had some of the Enron stench on it, never mind that iconic Vint Cerf was there.

Daimler 'lost' $34B of a $40B acquisition price with the abortive Chrysler deal on the surface of it; probably twice more in operating losses -- Autonomy pales alongside that.  Mattel nearly went bankrupt from buying the Learning Company; Compaq did so from the DEC acquisition.  Sprint 'lost' $30B of its $36B acquisition price with Nextel in 2006.

The problem reading these great NY Times analysts is that their sense of history is about four minutes long, and they present facts that any fourth-grader could disprove on an iPhone before recess.

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