Everywhere right now, there are New Years' sales going on as retail outlets of all stripes look to divest old inventory and replace it with new. But the same is generally not expected at major corporations, which is why recent reports from Bloomberg (News - Alert) suggesting that HP is looking to potentially sell off some underperforming divisions is so unusual in its own right.
HP recently made a 10-K filing with the United States' Securities and Exchange Commission, which contained within in a mention of plans to consider "the potential disposition of assets and businesses that may no longer help us meet our objectives.” This makes the idea that they're going to sell off chunks of the business about as clear as can be short of an official announcement that they're planning to sell off chunks of the business.
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But while this is commonly a good idea--a business gets to focus better on its core competencies while at the same time allowing the largest numbers of people to keep their jobs as those companies that buy pieces of the divesting company need experienced people to perform those functions--it may be a bit problematic for HP to pull it off.
Recently, HP staged write downs measuring in the multiple billions of dollars, especially as related to the acquisition of Autonomy and Electronic Data Systems (News - Alert). That in turn is likely to have a serious impact on any plans HP might have to sell any divisions, an impact even HP acknowledges as a strong possibility. From their 10-K report: "...may encounter difficulty in finding buyers or alternative exit strategies on acceptable terms in a timely manner.”
That's definitely going to be a problem for HP; with Autonomy (News - Alert) and Electronic Data Systems alike weighing down on the balance sheets, any potentially interested buyer is going to look askance at pretty much any opening price HP asks for any one of its underperforming divisions. Worse, issues of demand may also come into play; HP's quite on record as saying these are indeed assets and businesses that aren't helping HP meet its goals, so why would businesses be interested in buying underperforming assets from HP?
Sure, there are those who will want to augment their own showings in particular market segments, but they'll likely have the advantage in any negotiations, knowing that HP wants to cut those particular segments loose.
It will be interesting to see just what HP's plan for 2013 is, especially after the disaster that was 2012 for them. One thing is quite clear, though, they're going to need to do something and in short order to keep their main businesses ultimately afloat.
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Edited by Brooke Neuman