Venerable tech company Hewlett-Packard is in a word of hurt. It will need years to fix itself, CEO Meg Whitman says.
One way it could get that time could be to go private, and at least one analyst is starting to run the numbers on such a deal.
Sterne Agee analyst Shaw Wu told Business Insider that he's not just postulating a what-if scenario: "This is something we've heard, that someone has looked at," he said. "This is the type of candidate that the private equity guys would look at, so hated by public investors, potentially undervalued."
But the stock would need to drop to about $10 for a private-equity deal to make sense, he believes. It's trading below $15 today, a ten-year low, and has dropped like a rock since February, when it was trading at about $30.
HP has been so full of bad news, $10 seems within reason. On Wednesday, CEO Meg Whitman told analysts that HP's earnings will fall by more than 10 percent next year. The company reported its biggest quarterly loss earlier this year, and Whitman said it could be 2016 before revenue growth picks up again.
This would be a huge deal.
"I don't remember a private equity deal of this size," Wu said. "HP, even with the beating it's been taking, still sports about $30 billion market cap. From a revenue side, it's still at $100 billion."
On the flipside, private-equity guys want companies where "the sum of the parts is worth more than the whole" and they can make money by breaking it up.
When it comes to HP, "we're not sure" that it's worth more apart, Wu says.
But if the stock hits $10, that could make going private a real option, Wu says.
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