August 20, 2011- HP stock fell more on Friday than at any other time in over 23 years. They issued forecasts that did not meet analyst’s estimates as well as unveiling a new strategic shift that undermined the confidence in the PC giant’s management.
The Palo Alto based company’s shares dropped $5.91 to $23.60 or close to 20% as of the close of business Friday. This was the largest the stock has dropped since Black Monday on October 19, 1987. The company lost over $16 billion in market value from one day to the next after making their plans known to the public.
The company CEO, Leo Apotheker, lowered sales forecasts again, marking the third time since last November when he took over the position. The company announced plans to spin off the PC unit, drop the WebOS software for mobile devices and purchase, for $10.3 billion, Autonomy Corp.
The credit rating for the company debt may be downgraded this week and investors may be worried about the time it will take for all the changes to take effect. With just the evaluation of the PC unit possibly taking between 12 and 18 months, said the company.
Analysts lowered ratings on the company stock with some rating it a sell and saying it was only worth $20.