October 2001

HP bought back its stock and continued to sell the merger

Joining a host of companies across many of the world’s industries, HP restarted its $1.8 billion buyback plan for its company shares, which remained embattled at press time trading around $17 a share. The deal lost nearly $5 billion of the $26 billion in value once the merger was announced. In a tough market, Compaq’s shares remained under $10 a share. CEO Carly Fiorina and Compaq CEO Michael Capellas continued to tour analyst offices and high-profile press outlets, attempting to throw a positive light on the merger between the two computing giants that threw their stocks into a tailspin. Specifics of what products would survive the acquisition of Compaq remained murky, as the CEOs claimed securities rules prevented them from announcing details. Tea-leaf reading on the fate of distinctive products like MPE/iX and HP e3000s rose to a high art form in the weeks following the merger announcement, with one hopeful pattern emerging at the Gartner Group conference in early October. Asked by Computerworld which operating systems it might get rid of — between HP and Compaq the companies now support eight — Fiorina declined to specify road maps of elimination. But the magazine quoted her as saying that “I think the first really important point is that multiple [operating systems] are here to stay, because they play different roles, period.” The analysts got Fiorina to confirm the product roadmaps will be available within a month of when the deal closes.


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