HP stock dives 20% after flurry of analyst downgrades
A day after announcing a series of transformations to its business, Hewlett-Packard Co. lost 20% of its market value -- or about $12 billion -- as investors stayed skeptical about the company's ability to reinvent itself and a half-dozen Wall Street analysts downgraded its stock.
The drop was an extension of losses in after-hours trading on Thursday following the company's announcement that it was seeking a way to jettison its personal computer division, the world's largest, and that it was stopping production of its TouchPad tablet and line of smartphones. The company said it would pay close to $10.3 billion for UK business software company Autonomy Corp.
"We are worried that HPQ may be stretched thin trying to do too many things at the same time," Stern Agree analyst Shaw Wu wrote in a note to investors. Wu downgraded the stock rating to neutral from buy, and suspended his firm's price prediction for HP's stock in order to recalculate based on the recent moves.
HP stock was also downgraded by analysts at Deutsche Bank (sell), Credit Agricole Securities (underperform), Needam & Co. (underperform), UBS (neutral), Robert Baird & Co. (neutral), and Cross Research (hold).
By midday, the stock was down 20.0%, or $5.91, to $23.60.
-- David Sarno
Photo: Hewlett-Packard CEO Leo Apotheker in San Francisco in March. Credit: Paul Sakuma