HP chief executive Leo Apotheker has embarked on an important set of meetings with investors in London and the US, in a bid to boost the company’s reputation after its controversial decision to abandon the PC market and to buy UK software firm Autonomy at a significant premium.
On Friday, HP announced it would stop selling personal computers, tablets and smartphones and refocus its efforts on software and services. The move coincided with the purchase Autonomy at a 79 percent hike from its stock market value. The news sent HP’s shares into a nose dive, losing 25 percent of their price.
Apotheker, the former SAP chief executive, is set to tell investors that the change is vital in order for HP to be at the forefront of the IT industry, the Financial Times reported. He will also hold meetings with major shareholders in New York and Boston.
Apotheker and HP’s financial director, Cathie Lesjak, have already spoken on the phone to many of the company’s largest shareholders.
Apotheker told the FT that HP was “at a pivotal point in our history”, adding: “If HP did not make this move, we would be on the fringe.”
HP would lose $40 billion in revenue but recoup this elsewhere, he said, while improving profit margins and growth prospects. The PC market is notorious for offering wafer thin margins to manufacturers and stores.
Ray Lane, HP non-executive chairman, said he understood the concerns of investors: “I fully appreciate that changes of this magnitude are hard to comprehend and swallow at the current share price.”