The Ultimate Demise of Hewlett-Packard Company (HPQ)

True, even the best companies sometimes make acquisition mistakes. International Business Machines Corp. (NYSE:IBM), for instance, took a massive write-off of $8.8 billion on restructuring charges back in July 1993. A year ago, Microsoft Corporation (NASDAQ:MSFT) reported taking a $6.2 billion non-cash charge to account for its disappointing 2007 acquisition of Internet advertising firm aQuantive. But keep in mind that Microsoft and IBM are six times the size of HP… and these write-offs were one time blips. With HP, write-offs aren’t the exception to the rule – they are the rule.

These massive write-offs indicate that HP’s management doesn’t have the first clue on how to price target companies. It’s down-right embarrassing. I believe it’s only a matter of time before some huge write off happens resulting in a total wipe-out of the company’s equity.

This Fool looks ahead

Hewlett-Packard Company (NYSE:HPQ) hasn’t proven itself. It isn’t the technological innovator that it used to be, and it has been losing sales in all segments. If you add to that the company’s terrible acquisition track record – you’ve got yourself a ticking time bomb. I recommend you stay away from it.

The article The Ultimate Demise of Hewlett-Packard originally appeared on Fool.com and is written by Shmulik Karpf.

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