Thread, RE: HP
A couple of thoughts on the article posted re: HP's fallout with the son of Hewlett:
1. Why did he as a Board member flip-flop and change directions?
The only time a board member from any company could arguably flip-flop on a decision would be if new data comes in that contradicts existing data. As a rule, board members of companies do not flip-flop in their decision, they are reliable, consistent decision makers. This is because flip-flopping directions is horribly expensive for the operations of any company. So, decisions are done 'right' the first time around. This isn't to say that I agree (or disagree) with the merger, but it's an observation that flip-flopping would be considered unusual board behavior by any company.
New data could certainly warrant a change of opinion. If the flip-flopping had to do with the entrance of new data, such as, "the further we went along, the more we discovered the cultures were not compatible", then that would make sense, because that would be considered new data. But not a change of opinion due to reasons listed, because these would have existed when he voted "yes" as a board member.
2. He has a conflict of interest as a shareholder of a foundation the moment his foundation vote would conflict with his vote as a board member. His position as a board member makes him fiduciary responsible for the well-being of the company, which I believe would include avoiding a $700M fine for any cancellation of the merger due to any potential board-level activities. This would mean that if his foundation has a conflicting vote to his initial vote as a HP BOD, it would require him to step down from the foundation so that his foundation's vote doesn't conflict with his vote as a board member. By not stepping down, he has placed HP in the potential position of being liable for $700M. (Again, this has nothing to do with whether I agree or disagree with the merger.)
3. Why take it public? Anyone who has good, solid reasons can win anyone, and any board? Why take a hostile approach to business? Why not take each board member aside and win them over, one by one? Bad PR can be the kiss of death.
4. A founder should never ever get in a legal tangle with their own company, and that includes any siblings of founders.
5. And here's something that really bugs me, if you look at the reasons listed, you'll see there's a focus on HP's printer business, HP's image business and HP's service business, but not a thing about their server business, as if it doesn't matter to them. Well, as an INTC shareholder, it matters to me: here we have a situation where Intel's future is dependent upon HP, and Servers aren't even mentioned as an item of importance on an HP board member's list. If HP topples or drops developing Server chips, what does that mean to Intel? Boy, I'm glad Intel bought Alpha. Maybe they could be a backup plan if HP goes down hill.
But that's Server chips, what about delivering Server solutions?
6. It doesn't matter if either HP or Intel can build Server chips if both HP and Compaq start stumbling and can't deliver Server solutions. (Wasn't there an article about a stop shipment or delay by Compaq? Is this an early sign of a defocus? I actually hope the problem proves to be Intel's problem, at least Intel can fix what they can control.) As HP fights with themselves and both HP and Compaq lose their focus for a quarter or two, what happens to their ability to focus on delivering Server solutions to the market? Intel doesn't ship solutions, HP and Compaq do. Intel doesn't collect the revenue unless HP or Compaq ship. If HP and Compaq falter, this impacts Intel. What is Intel's backup plan here? As an Intel shareholder, this situation doesn't make me feel comfortable.
7. Without having any data, I don't have any opinion on the Compaq/HP merger. The only thought I have is, I hope this doesn't negatively impact INTC.
Who is Intel banking to deliver Server solutions into the market place? Dell certainly hasn't given any indication of wanting to go high-end. So, what's the backup plan if Compaq and HP really start to stumble in the market place?
Regards,
Amy J |
