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Fri Oct 5, 2012, 03:32 PM

Analyst On HP: The Stock Is Technically Worth Negative $2

Source: Business Insider



HP this morning lost one of the few Wall Street analysts that was still giving it the benefit of the doubt. Sterne Agee analyst Shaw Wu downgraded his recommendation to neutral, telling us that HP's balance sheet is so awful, the company's stock is really worth negative $2.

"Their balance sheet is a mess," Wu told Business Insider. "We calculated—I couldn't believe this—the tangible book value -$2 . The book value, when you look at it, says $16. But you have to take out the $36 billion in goodwill. They are going to write that off, the whole thing at some point. So basically, the company's intrinsic value is negative. They are fortunate the stock's not zero. This is not an opinion. These are facts."

Besides the balance sheet, Wu says the company has a handful of other issues for which there's no easy fix. These include a PC business under attack from mobile devices, Windows 8 sales that will likely be lackluster and a printer business dying as people shift to electronic displays.

"We've given them the benefit of the doubt," Wu told Business Insider. "They are blaming everything on the economy. But the problems they have are not economy-related. If that's the case, why are Apple and IBM doing well? To us that makes no sense. So we think the problems are structural."

Read more: http://www.businessinsider.com/shaw-wu-sterne-agee-hp-valuation-2012-10



I posted a while back that HP was likely unsalvageable on its own, and totally unsalvageable under Meg Whitman, who is there to fire people and collect a big exit check. Nothing more.

Mittens will be proud. These people are crooks.

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Arrow 23 replies Author Time Post
Reply Analyst On HP: The Stock Is Technically Worth Negative $2 (Original post)
onehandle Oct 2012 OP
The_Counsel Oct 2012 #1
Cobalt-60 Oct 2012 #10
Kelvin Mace Oct 2012 #2
kimbutgar Oct 2012 #3
Trenton Oct 2012 #4
truthisfreedom Oct 2012 #5
wordpix Oct 2012 #16
Ash_F Oct 2012 #18
Brother Buzz Oct 2012 #15
Stargazer09 Oct 2012 #6
Not Sure Oct 2012 #7
sendero Oct 2012 #11
Stargazer09 Oct 2012 #22
Hugin Oct 2012 #14
Stargazer09 Oct 2012 #23
GeorgeGist Oct 2012 #8
bucolic_frolic Oct 2012 #9
Hugin Oct 2012 #12
Gman Oct 2012 #13
wordpix Oct 2012 #17
jsr Oct 2012 #19
Comrade_McKenzie Oct 2012 #20
bemildred Oct 2012 #21

Response to onehandle (Original post)

Fri Oct 5, 2012, 03:42 PM

1. Wait ... so If I Were to Buy HP Stock...

...someone would be paying ME to take it off their hands?

How do I get in on THAT action...?

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Response to The_Counsel (Reply #1)

Fri Oct 5, 2012, 09:41 PM

10. So if we're paying negative cost

Then positive cash comes to us.
I'll have 5 million shares, please!

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Response to onehandle (Original post)

Fri Oct 5, 2012, 03:51 PM

2. Let me see if I understand this analyst

The stock is worth NEGATIVE $2 a share, but he is only "neutral" on it?

I assume that HP would have to sell a computer which gave everyone the Ebola virus before this guy would issue a "sell" recommendation.

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Response to onehandle (Original post)

Fri Oct 5, 2012, 03:57 PM

3. Thank God Meg didn't do to California what she did to HP!

I shudder to think where we would be here in California is Meg was elected Governor. Probably preparing to declare bankruptcy and rigging the election.

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Response to kimbutgar (Reply #3)

Fri Oct 5, 2012, 04:12 PM

4. I hear you!

This was the sort of expertise and experience she was going to bring to running Cali? Thanks, voters, for not falling for that canard. We really dodged a bullet on that one.

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Response to kimbutgar (Reply #3)

Fri Oct 5, 2012, 04:29 PM

5. Didn't she have some problems toward the end of her tenure at eBay?

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Response to truthisfreedom (Reply #5)

Sat Oct 6, 2012, 12:07 AM

16. I think she was the one who told her domestic worker to move on b/c she was undocumented

and that would look bad for Meg when she ran for gov---or was that another repuke?

Anyhow, as I recall, the household worker had been with Whitman for several years and I think she was let go without severance or anything, so she blew the whistle.

I'm not from CA and it was awhile ago...don't know if I have the story straight.

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Response to wordpix (Reply #16)

Sat Oct 6, 2012, 01:06 AM

18. That was Mitt.

Or hell, could have been both in separate cases.

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Response to kimbutgar (Reply #3)

Fri Oct 5, 2012, 11:56 PM

15. Thank God California didn't elect Carly Fiorina to the Senate

Truth be told, it was Carly Fiorina's stewardship that started HP's auger into the ground.

Bill Hewlett and David Packard are rolling in their graves.

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Response to onehandle (Original post)

Fri Oct 5, 2012, 04:40 PM

6. Well, I could see this coming

Their printers eat so much ink that I replaced all of them with printers from Epson and Brother. I habitually write the installation dates on the printer cartridges I use, and my new printers are very frugal with ink, especially when compared to my HP printers.

HP's scientific calculators used to be standard issue for engineers, but they stopped trying to make them better than the TI calculators at least two decades ago. I loved my calculator, back in the day, but they are nothing more than paperweights now.

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Response to Stargazer09 (Reply #6)

Fri Oct 5, 2012, 05:13 PM

7. Epson printers are good with ink compared to HP?

Wow, HP printers must have fallen off a cliff. Back in my civil engineering days, we used HP printers and plotters early on, eventually switching to Oce for the plotter. The HP printers stuck around for printing contracts and other documents until they were replaced by copiers. And I had an inkjet at home that did a pretty good job, too. Eventually, I went with Epson for the quality, but it was an ink hog. I ended up replacing it a couple years later with a new, improved Epson. Again, great quality but an ink hog. Between HP and Epson, I got way more out of the HP as far as ink is concerned. I wouldn't know how they are today, though.

And I still use my RPN HP 32sII calculator. They'll have to pry it from my cold, dead hands...

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Response to Not Sure (Reply #7)

Fri Oct 5, 2012, 10:19 PM

11. HP printers are..

... ridiculous consumers of ink, and their ink cartridges are overpriced. I'm done with them, I'm going to get a laser printer that prints 3000 pages on one toner cart that only costs twice what their crappy ink cartridges cost.

Don't compare HP of today to what they once were. They were once a world leader in scientific instrumentation and other cool stuff. Now they are third-rate electronic crap salesmen.

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Response to Not Sure (Reply #7)

Sat Oct 6, 2012, 10:09 AM

22. In my experience, yes.

I used to replace color cartridges in my relatively HP nearly every month, at $45+ per cartridge. My Epson has six individual cartridges, and I get about a year out of the colors and six months for the black. I print mostly knitting patterns with that printer, so lots of large, colorful pages totaling about 500 pages per year or so. My Brother printer gets a lot more use on a day-to-day basis, but mostly printing text, and it's frugal on ink, too.

I love the RPN function on my HP 48g!

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Response to Stargazer09 (Reply #6)

Fri Oct 5, 2012, 10:29 PM

14. HP's testing equipment was the best in the business back then, too.

'cept for maybe Techtronics.

Oh, but, they don't make that anymore. *sigh*

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Response to Hugin (Reply #14)

Sat Oct 6, 2012, 10:10 AM

23. They used to be so much better

It's sad how far they've fallen.

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Response to onehandle (Original post)

Fri Oct 5, 2012, 07:07 PM

8. Hewlett-Packard

wasn't built by sociopaths.

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Response to onehandle (Original post)

Fri Oct 5, 2012, 08:19 PM

9. Something about this story doesn't ring

So this analyst admits he's just now looked at the goodwill on the balance sheet?

What has he been analyzing? Chocolate bon-bons?

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Response to onehandle (Original post)

Fri Oct 5, 2012, 10:26 PM

12. Great job, Meggers!

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Response to onehandle (Original post)

Fri Oct 5, 2012, 10:27 PM

13. $36 billion in Good Will is ludicrous

Clear Channel used to do the same thing to cover up bad financials.

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Response to onehandle (Original post)

Sat Oct 6, 2012, 12:16 AM

17. the hard drive for my HP ProBook failed 6 wk. after the one-year warranty ran out

This after the salesman told me the parts in the ProBook were so wonderful, I would not have a problem.

This after I had previously bought a brand new HP desktop in 2004 and had to take it back for not powering on. The second one I took home I had to bring back for not booting up. The third was a Sony Vaio that's been great, no problems for 7 years.

Now I'm trying to get some money back for my ProBook repair + new hard drive but I keep getting the runaround from HP. They're sending my request all over the world, to the the tech people, the sales people, to Meg Whitman's office...I know I probably won't get reimbursed but it's been instructive on how badly run this company is.

I do love my ProBook, despite it all - however, it cost me a lot of money to get the problem diagnosed and then get the HD replaced after one year of use.

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Response to onehandle (Original post)

Sat Oct 6, 2012, 02:23 AM

19. Current HP products are between mediocre and trash

The old HP is long gone.

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Response to onehandle (Original post)

Sat Oct 6, 2012, 03:04 AM

20. Their laptops are complete shit now. nt

 

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Response to onehandle (Original post)

Sat Oct 6, 2012, 09:14 AM

21. iMeg stays true to form. nt

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