Capellas Quits as HP's No. 2, Reportedly WorldCom Candidate
URL:http://www.foxnews.com/story/0,2933,69881,00.html
Monday, November 11, 2002
NEW YORK — Michael Capellas quit Monday as the No. 2 executive at Hewlett-Packard Co. (HPQ), just hours after a newspaper reported he is a leading candidate to take over troubled WorldCom Inc.
The news sent shares of the top printer maker and No. 2 personal computer company down sharply.
Newspapers, including the Wall Street Journal, on Monday reported that Capellas was the top candidate to take over John Sidgmore's chief executive officer job at WorldCom Inc. , which has filed for bankruptcy.
WorldCom, the telecommunications giant that has racked up more than $9 billion in accounting problems, declined to comment. Sidgmore had been looking for a replacement since Sept. 10, when he said he would step down.
Capellas will also leave the company's board of directors, HP said, and the president spot will not be refilled.
While some investors and analysts said Capellas' departure had been expected, one analyst said his leaving was a negative for the stock because he had been in charge of operations and was helping to drive revenue growth to HP's promised targets.
The announcement from HP pushed its shares down by more than 10 percent in morning trading, making it both the most actively traded stock and the biggest percentage loser on the New York Stock Exchange.
An HP spokeswoman declined to comment on whether Capellas was headed for WorldCom. She said the move is effective December 1.
Capellas, who was previously chief executive officer of Compaq, has reported to Carly Fiorina, HP's Chief Executive Officer since HP bought Compaq in May after an extended, messy battle with HP shareholders.
Fiorina said Capellas' departure came as the company meets its targets for integrating the two companies. For instance, in order to win shareholder approval for the deal, the companies vowed to meet targets such as cutting 15,000 jobs this year.
Investors and analysts said that Capellas' departure was not unexpected. Capellas had been promoted to Chief Executive Officer at Compaq in 1999 and had been welcomed by investors who viewed him as a competent manager, one investor said.
"He did have a period of time of being No. 1 and calling the shots at Compaq," said John Rutledge, a portfolio manager at Evergreen Technology who owns HP shares. "I think for anybody who is capable and like that, moving back into the No. 2 shot after the merger, he probably was willing to look at opportunities."
The move could indicate that Hewlett-Packard is going to report strong quarterly results next week, one analyst said. |
