HP's price-earnings ratio dips and Oracle eyeing the takeover

HP's share price has fallen all the way in the past 6 months. Sina Science and technology news Beijing time, August 23 morning, as investors to HP's strategic transformation dissatisfaction, resulting in the technology industry is the lowest valuation level of enterprises, and may be acquired by other enterprises. The stock fell. Hewlett-Packard announced a series of strategic transition plans last week, including the intention to split the PC business, acquire British software company autonomy and close the mobile business. After that, the company's market capitalisation has evaporated 10 billion of dollars.　　With its share price down 20% per cent, HP's dynamic P/E ratio is only 5 times times lower than the average for technology companies by 70%. Since he became CEO last November, Hewlett-Packard has been underperforming and has seen its first profit decline in more than 10 years, leading to a sharp fall in the company's share price. The US investment company Solaris Group believes HP may now split the company and attract buyers. The server department can help Oracle expand its market share 5 times times and become the world's largest server vendor.　　HP's printer business is 70% higher than the company's overall profitability, so it is likely to attract the attention of private-equity firms. "The current valuations are very attractive," said Michael Mullaney, Fiduciary Trust fund manager at US investment firm Michael Mulani. For companies that can profit from it, a takeover offer is likely to be made, or at least some business will be acquired. He added: "HP's current situation is like a ship without a rudder."　　"HP spokeswoman said the company would not comment on rumours and speculation. Strategic transformation HP bought Compaq 9 years ago and became the world's largest PC maker. But the company is now ready to split the PC business.　　In addition, HP has abandoned its plan to use webOS software for tablets and smartphones. "Splitting the PC business can release shareholder value," said Ray Lane, chairman of Hewlett-Packard, Lane.　　"He and Apotheker will travel around the world this week to communicate with investors in the hope that they will continue to hold HP shares." Hewlett-Packard last week also announced a $10 billion purchase of British software company Autonomy, a premium of 59% per cent of the company's average trading price over the past 20 days.　　The acquisition was the biggest merger and acquisition by Hewlett-Packard since 2008, when it spent 13 billion dollars to buy eds, and the biggest deal since Apotheker became CEO. Apotheker said in San Francisco March 14 that he plans to develop "rigorous" mergers and acquisitions in the areas of cloud computing, security and data analysis.　　He also cut HP's forecast for the fiscal year for the third time last week. The former SAP CEO is aggressively expanding its cloud computing business.　　And as consumer demand is increasingly attracted to Apple's ipad, the company plans to challenge Oracle and IBM in more lucrative corporate markets. The average valuation analyst expects that, in the fiscal year up to October 2012, HP has everyEarnings will fall by more than 1% per cent.　　This will be the first time that HP has slipped in earnings per share since 2001. HP's share price has fallen 42% since Mr Apotheker took over as CEO of Hurd, who left the sexual harassment scandal. The standard and Poor's it index fell just 8% per cent in the same period.　　Mr. Hurd is currently chairman of the Oracle Joint executive. HP's current dynamic P/E ratio is just 5 times times the bottom of more than 230 tech companies in the MSCI World index.　　RIM's share price has fallen 82% per cent, with a dynamic price-to-earnings ratio of about 5.2 times times, due to the challenges of Apple's iphone and Google's Android platform. By the end of last week, HP's static P/E ratio was only 5.3 times times the lowest in 1980 years.　　Tim Ghriskey, chief investment officer of the Solaris Group, said that because valuations were very low, rivals might consider acquiring HP Tim Griski. Jason Maynard, an analyst at Wells Fargo, Jensen Menade, said the acquisition of HP's corporate business would give Oracle "huge benefits".　　HP's server business could help Oracle compete with IBM in enterprise hardware, he said in a study released on August 22. According to IDC, a US market research firm, HP last year tied IBM to the world's largest server maker. But the first quarter of this year was the dominant one, with a share of 31.5%,IBM only 29.2%. Oracle's market share in the first quarter fell from 6.8% last year to 6.5%.　　Dell shares about 15.6%. "It is entirely to be expected that other companies are interested in buying HP or buying part of HP's business," Griski said.　　"He believes that both Oracle and IBM could be potential buyers of HP."　　Oracle and IBM spokesmen declined to comment. Mulani that Oracle's print business would also attract potential acquirers. The department's sales of 26.5 billion dollars in the past year, operating profit rate reached 17%, become HP's most profitable business.　　HP's overall operating profit rate for the past 12 months was about 10%. "The print and imaging business has always been the diamond in the haystack," said Daniel Morgan, Synovus Nomura fund manager at the US investment firm.　　"The company manages 4 billion of billions of dollars in assets and holds HP shares. HP's current market capitalisation is about $50.7 billion trillion. But James Kelleher, Argus Research analyst at James Kellerh, said that as the US economy was likely to bottom two and lead to a bear market, potential acquirers could also wait for HP's share price to fall further. "There are few companies that can bring in 55 billion dollars," he said. Most EnterprisesThink the valuations of these assets will continue to fall.　　"Oracle is unlikely to buy HP until HP splits other businesses, such as PCs and printers, because the software giant is not interested in the business," according to people familiar with Oracle's strategy. Mulani that HP must consider various options to help shareholders make up for losses. He said: "Look at the stock price of Hurd's departure, and then look at the current situation at a glance." "(Ding Macro)