Trading in shares of Hewlett-Packard has been halted on the New York Stock Exchange (NYSE) today as the market awaits confirmation or denial of a massive restructuring.
According to industry speculators, news of the restructuring will be announced after the US market closes. With trading halted, HP will have to make some form of announcement to enable the company to return to the market tomorrow.
The word on and off the Street is that HP is to split itself under the restructuring to become two, more tightly focused companies that will be separately traded ((see story earlier today)). So far HP representatives have made no comment and most subsidiary operations seem surprised and bemused by the news.
"There is a lot of smoke - is there fire? We don't know yet," said Andy Butler, analyst at Gartner Group.
The shares traded up around $3 to $4 in pre market trading but were suspended on $65 7/8 when the market opened. A spokesperson for the NYSE gave a standard explanation: "The trading halt was due to news pending."
Suspension is rare, usually reserved for major acquisition news or very significant corporate financial information. But whether there is truth in the rumours or not, HP will now be forced to comment today to quell the whispering.
One insider did note that HP some months ago asked corporate management consultants McKinsey to 're-engineer' the company and these rumours could be leaks of the results of its first recommendations.
Whatever the truth in these rumours, everyone agrees something drastic of the order of a company split is needed to get HP's growth and momentum restarted.
An analyst from another organisation was reported as saying, "Without knowing any of the details of the restructuring, HP has been suffering from the three Bs - it is big, bloated and bureaucratic. This would be one step on the path to correction."
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