Upon news this week that Hewlett-Packard is looking to stop producing TouchPad tablet computers and that it is “in discussions” to buy British software company Autonomy, the company took a 26% drop in its stock Friday. The stock dropped $5.91 to $23.60 — the lowest the HP stock has been since August 2005, when then-CEO Carly Fiorina was ousted from the company.
The company also announced that it will stop production of webOS software and that it wanted to separate its customer PC division in a Thursday announcement.
Many critics, including stockholders, questioned the tactic by HP. While they are looking to purchase Autonomy for $10.2 billion, the company isn’t making software right now, making the decision to drop its core products in favor of making software leery to stockholders. Still, the company hopes that getting out of computer-making business and focusing on making software will cost them less and generate higher profits in the future.
The personal-computer maker also said that it was exploring “strategic alternatives” for its personal computer division and that it was also looking at a “full or partial separation from HP through a spinoff or other transaction,” according to the Los Angeles Times.
In recent years, profits have dropped for the company as demand for personal computers and laptops dropped and demand for tablets, such as Apple’s iPad, and mobile phone demands increased — and did the same job as HP’s products in a much more convenient way.
The LA Times reports that HP’s TouchPad tablet is far and away behind its competitors, barely registering behind 95% of the iPad market share.
While the stock for HP dipped on Friday, Autonomy saw its stock skyrocket — jumping 50% to $37.76 per share.