HP Might Break Into 2 Smaller Companies

The Wall Street Journal reports anonymous sources claim Hewlett-Packard will spit in two. If true, what could that mean for the company?
Posted at 10:43 PM, Oct 05, 2014

According to new reports, information technology corporation Hewlett-Packard could have plans to split the company into two. 

Nothing's been officially announced yet, but The Wall Street Journal cites anonymous sources said to be familiar with the matter who say HP will separate its computer and printer businesses from the hardware and service operations. The Journal notes the reported move "would come amid a wave of breakups and spinoffs at technology companies and in the wider corporate world, underpinned by the idea that companies with a narrower focus perform better."

According to those sources, the split would look something like this:  Current CEO Meg Whitman would become CEO of the enterprise oriented side of the company and chairman of the PC and printer business. Patricia Russo, current lead independent director, would become the chairman of the enterprise side, while current PC / printer exec Dion Weisler would become the CEO of that company.

So if the rumor is true, what could it potentially mean for the company and its shareholders? (Video via Hewlett-Packard)

For shareholders, the change would have little affect on HP's value — unless, of course, the split is successful in boosting the company to its previous spot as the world's number one PC vendor. 

That title was stolen last year by China's Lenovo Group

As for what else the separation could mean for the company itself, a business professor told Bloomberg, "It is a little troubling to see Whitman split her time between a full-time job as CEO of the enterprise business and time-consuming duties as chairwoman of the legacy business that will require a lot of attention at the strategic level." 

The idea of separating the company is one Whitman has tossed around for a while. As The New York Times reports, Whitman previous rejected the idea of a split, claiming that "owning that much computer manufacturing ... gave HP valuable pricing power in all its markets."

A spokesperson for HP would not comment on the reports. But if the Journal's sources are reliable, we could hear from HP as soon as Monday. 

This video contains images from Getty Images.