I tried to get away from the HP thing, but it is still getting worse for HP. Now Congress is involved.
I saw this quote in the San Francisco Chronicle:
Despite the furor over pretexting, investors have largely ignored the scandal. HP shares rose 27 cents Monday to close at $36.36 on the New York Stock Exchange, near the top end of its 52-week range of $25.53 to $36.73.
A friend who is a stock trader told me that the market might actually be predicting that a new board is coming — and is raising the price in advance of such an event. A new board would mean better leadership for HP, which would increase growth and everything that shareholders love. But, it’s a weird signal to send, most people will see the increase in share price as evidence that the shareholders aren’t willing to do anything about this board. The problem is, what if this board stays in place? Is there any chance that this board will be able to heal the rifts, get through the bad PR, and start doing anything close to what a board is supposed to do? Plus, with Congress getting involved this will be a distraction for top management at HP, even those who aren’t on the board. Will shareholders continue their excitement if this drags on for weeks, or months? Yeah, the PR will go away, we all have short memories and there’ll be stuff that’s more fun to talk about soon (Steve Jobs, please save us from this story!)
This quote, in the San Jose Mercury News, though, captures the mood of most of the people I talk with about this:
“Whatever else happens, it’s a sad day for HP, and a sad day for Silicon Valley,” said venture capitalist Venky Ganesan, managing director of Globespan Capital Partners in Palo Alto. Hewlett-Packard “stood for what we all feel proud about in Silicon Valley. It was an icon about two guys in a garage who had very idealistic notions: non-hierarchical, collaborative, meritocratic. It was about doing the right thing.”
Update: The Los Angeles Times writes more about shareholders’ reticence to punish this board and also says that if CEO Mark Hurd gets tainted by the stench coming out of the board that HP could pay a “catastrophic” price.