Hewlett-Packard Company (HPQ) Gets Boost Over Carl Icahn Buy RumorsVW Staff
Hewlett-Packard Company (NYSE:HPQ)'s stock jumped earlier today after rumors Carl Icahn is building a stake in the company.
The Palo-Alto based company, which is one of the world’s leading PC manufacturers, saw a jump in the market value of its shares after rumors surfaced that Carl Icahn, renowned investor and business magnate, was considering a buy-up of HP shares.
The rumours of Icahn’s investment in Hewlett-Packard Company (NYSE:HPQ) caused a rally in the stock’s value, pushing it up to $14.59 – up by five percent from Friday’s close.
Last month saw HP sink to its worst low in 10 years, after it suffered an $8.8 billion write-down connected to its $11.1 billion acquisition of the British software company, Autonomy.
This isn’t the first time the Carl Icahn effect has been seen. Back in October, news that Icahn had bought 10 percent in Netflix (NASDAQ:NFLX) caused stock to jump in value to $79.24 per share, sometimes as high as 21 percent. Circuit breakers intended to limit big swings in stock prices were tripped as a result, causing the stock to close at $79.24 per share – a rise of roughly 13.9 percent for the Los Gatos movie and TV streaming company.
Icahn, whose net worth was valued at $14 billion in 2011 by Forbes, has earned himself a reputation as an activist shareholder and a ‘corporate raider.’ He tends to seek out undervalued companies and then buys up large amounts of shares. At the time of his Netflix purchase, the stock had lost more than two thirds of its value from its almost $300-per-share value last year.
Hewlett-Packard Company (NYSE:HPQ)'s stock has, like Netflix, been suffering in the past year. Hewlett-Packard Company (NYSE:HPQ)'s market capitalization is down to $27.9 billion, with stock also down by 44 percent in the last year. The company recently blamed their ill-considered acquisition of Autonomy and called on authorities to investigate “serious accounting improprieties, disclosure failures, and outright misrepresentations at Autonomy” prior to the acquisition.
The losses wiped out Hewlett-Packard Company (NYSE:HPQ)'s profits over the quarter, causing a $6.9 billion loss, compared to the $200 million profit seen as the same time the previous year. Autonomy’s founder, Mike Lynch, denied the allegations and accused HP of destroying a “world leader” of the tech industry.