San Francisco - Hewlett-Packard investors bet on printers and PCs over the corporate-technology business, in the first trading since the company split up.
HP Incorporated, which kept the HPQ ticker symbol of the legacy company, jumped 13 percent to $13.83 at the close in New York on Monday. The advance gave HP, which sells printers and computers, a market value of about $26 billion.
Hewlett Packard Enterprise, which sells servers, storage devices and services, fell 1.6 percent to $14.49, giving the company a market capitalization of about $27 billion.
“I expected a lot of volatility in the next couple of weeks,” Meg Whitman, who drove the separation as chief executive officer of Hewlett-Packard, said in an interview. “Probably by the end of November, we’ll have a pretty good read on, you know, what is the market assessing the value of each company.”
She is betting that the split will help the companies compete better in a fast-changing landscape for gear and services. Now resources and time can be focused on a smaller group of businesses and more narrow markets. The division of the company, after months of preparation, took place on Sunday. Whitman is the CEO of Hewlett Packard Enterprise and chairman for HP Incorporated, which is led by Dion Weisler.
Larger personal-computer makers such as HP are gaining market share - and the battered industry could be showing signs of stabilization, James Kisner, an analyst at Jefferies, wrote to investors. HP was No. 2 in the industry in the third quarter with 18.5 percent of shipments, up from 17.8 percent a year earlier, according to Gartner.
“Tactically it’s hard to imagine that this is time to be selling stocks like HPI with PC exposure,” Kisner wrote. Opportunities exist for gains in printers as well, he wrote.
Shares of the original Hewlett-Packard stock fell 33 percent this year through Friday. Revenue fell 8.1 percent to $25.3 billion in its latest quarter, compared with analyst projections for $25.4 billion, according to data compiled by Bloomberg. Sales had declined for 15 of the past 16 quarters.
Hewlett Packard Enterprise could face challenges amid sluggish spending with information technology, Kulbinder Garcha, an analyst at Credit Suisse AG, wrote in a note to investors. Growth in the public cloud, made popular by Amazon.com, is pressuring Hewlett Packard Enterprise as more companies choose to get their computing and storage services via the Internet, he wrote.
Whitman said she’s optimistic the two companies, whose predecessor was started in 1939, is on the right course after the split.
“One thing that I think has kept HP around for as long as it’s been is the ability to reinvent itself,” she said. “Basically, what we’re doing, is, I think, positioning HP Inc and Hewlett Packard Enterprise to go on for another 75 years.”
BLOOMBERG