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Technology Stocks : Hewlett-Packard (HPQ) -- Ignore unavailable to you. Want to Upgrade?

To: The Duke of URL© who wrote (3465)	6/10/2004 12:54:49 AM
From: Charles Tutt	Respond to of 4345

"Why do you let your emotions or hatred enter into your analysis." Why are _you_ getting so excited? JMHO. Charles Tutt (SM)

To: The Duke of URL© who wrote (3465)	6/10/2004 7:47:00 AM
From: KAD	Read Replies (3) \| Respond to of 4345

Duke - Here's a great article essentially refuting the call to break up as senseless... OUR TAKE HP Busted By Ben McClure June 9, 2004 Merrill Lynch (NYSE: MER) analyst Steve Milunovich certainly grabbed Hewlett-Packard (NYSE: HPQ) investors' attention this week when he called for the IT giant to be broken up. Sure, Hewlett-Packard stock, well off its 52-week high, is lagging. But is a spinoff of the firm's printer and computer divisions the way to get the share price off the ground? I'm not convinced. There are all kinds of reasons for spinoffs, as I discussed in my recent commentary. The two biggest: transparency and focus. Investors get clearer information about big company's individual business divisions; at the same time, spinoffs separate businesses that don't make sense being under the same ownership. Admittedly, from an investor's perspective there is no such thing as too much transparency. But upping the information quality of Hewlett's financials doesn't necessarily call for a bust-up. We are not talking about a corporate jumble a la General Electric (NYSE: GE), Tyco (NYSE: TYC) or Liberty Media (NYSE: L). On the contrary, Hewlett has discernible businesses; the performance of each is actually fairly well disclosed. Moreover, advantages exist for keeping the businesses clumped together. PCs and printers go hand in hand -- they share a lot of the same core technology, plus common distribution and marketing channels. There is little to suggest that the two get in each other's way at all. Dell Computer's (Nasdaq: DELL) recent move into the printer market suggests there are good reasons for selling both under the same name. Besides, doing the splits can be painful. Dividing expenses like R&D and the cost of maintaining a global presence would add to the overall costs of doing business -- without adding any revenues. To experience full upside from a spinoff, investors might have to wait an awfully long time before the process is completed. Merrill Lynch's Mr. Milunovich -- not to mention many Hewlett-Packard shareholders -- thinks something needs to be done to revive the shares. Agreed. But a spinoff is not the thing to do the trick. Fool contributor Ben McClure hails from the Great White North. Ben owns shares in Dell