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HP Inc. Message Board

  • stockolock stockolock Nov 5, 2012 6:53 AM Flag

    HP closer to turnaround or bankruptcy?

    HPQ will have to take significant writedowns in Q4 because of their falling market cap. Typically most investors see these write downs as "GAAP" writedowns and ignore them. Debt holders and rating agencies can't ignore them and if HP is forced to write down thier assets to their market cap on October 31st they will barely have more assets then debt.

    HP could be a turnaround story if that had a warchest of cash and no debt, but they have completely hamstrung themselves with their balance sheet and paying dividends from a shrinking PC business.

    HP is in trouble, stratgic moves can be made but only if you have the financial resources to invest in and implement them. I don't see how they are going to do it.

    Get out before any of the following events occur:

    1. Delist from the dow
    2. Suspension of the dividend

    Sentiment: Strong Sell

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    • The company has a lot of debt. The biggest threat is from the falling cash flows. The low cash generation and high debt is causing delayed development of products. Management has already said they want more mobile but the estimated date is 2-3 years out. They want it now, but they simply cannot spend to develop it. This is actually be good news because it is forcing the company to return to a policy of funding new business from its profits. This worked for 60 years while HP provided the world wirh great products. Then the arrogant, greedy, narissistic pukes got a hold of the company and nearly ruined it. Let's hope the people in control have read and understood Dave Packards book.

      Sentiment: Hold

    • She already said 2015 before they turn it around. Dead stock and certainly will go to $9.

      Sentiment: Strong Sell

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