At least money’s not a problem
Another good thing has definitely been HP’s relatively quick financial recovery from the Autonomy fiasco. The fact that HP took on a pile of debt to fund its ill-fated Autonomy acquisition was a definite cause of concern for investors. After all, nobody would like a debt-ridden company whose future is uncertain. So when the company’s CFO assured that the debt had already been reduced by a healthy $1.8 billion, it signified that HP could at least be free from financial tensions even as it stages a slow and painful recovery.
It does matter what you are launching
But then again, the moment any thoughts of a possible recovery come to my mind, I feel dejected just by looking at the list of some of HP’s upcoming products slated for release. As I run my eyes over the list that includes mainly touchscreen PCs and notebooks, it appears HP is stuck in time, even as consumer preferences have distinctly shifted towards mobile devices such as smartphones and tablets. HP may be trying to pack in a lot of innovative technology into these new and supposedly ‘appealing’ products, but at the end they probably fail to realize that it’s the product line-up that itself needs to be changed.
A glimmer of hope
Two exceptions stand out in the form of the CloudSystem and HP’s newest Android-powered tablets (in a distinct attempt to move away from Microsoft Corporation (NASDAQ:MSFT), as I had already stated before). While the HP Discover slated to happen in June this year will give us more details on the company’s cloud-based venture, the company’s low-cost, 7-inch Slate 7 Android-powered tablet might open up a new stream of revenue simply by banking on the world’s most popular operating system. But then, that’s about it. And if Whitman is waxing about how their upcoming product Moonshot will wipe everyone off their feet in the server market, let me remind you that by the time Moonshot will be commercially marketable, competitors such as Cisco are unlikely to sit idle on their front.
Final thoughts
HP’s generating pessimism, and a large dose of it. This is one company whose restructuring efforts will take some more time and the upcoming product line-up also does not inspire confidence, to say the least. You can hold on to HP, even if it is for the sake of dividends, but if you still find yourself looking at a similar situation after a couple more quarters it’s perhaps time to wash your hands of this stock.
The article Does It Pay to Believe in This Company? originally appeared on Fool.com and is written by Subhadeep Ghose.
Subhadeep is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.
Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.
