Investors shrug off HP turmoil
TEXT OF STORY
SCOTT JAGOW: Congress certainly seems to care about what happened at HP. Yesterday, lawmakers asked the company to turn over some information. Congress is looking into the practice of pretexting — impersonating someone to get access to their phone records or other data. The FBI is now involved. It’s checking to see if HP broke any laws by having private investigators pose as board members and journalists. But one group of people that doesn’t seem to care is Hewlett Packard’s shareholders. Yesterday, HP’s stock closed near its best price in a year. More now from Rachel Dornhelm.
RACHEL DORNHELM: The HP scandal concerns potentially illegal activities by an in-fighting board.
Harvard Business School Professor Jay Lorsch says savvy investors know this has little to do with the company’s day to day operations.
JAY LORSCH: If the board begins to make some dumb decisions which affect the business, then I think the stock market might respond differently. At the moment, this is a big embarrassment to a bunch of directors.
So far HP has had a great financial year under new CEO Mark Hurd.
Industry analyst Roger Kay says investors may hope Hurd shakes up the board as a result of the scandal.
ROGER KAY: Then there’s a possibility he could take more elaborate or broader steps than he would have taken hemmed in by a board that was chosen by his predecessor.
Kay says HP’s stock might have also bounced up after its main competitor disclosed trouble.
Yesterday Dell announced it will delay its quarterly earnings report amid a federal probe.
I’m Rachel Dornhelm for Marketplace.
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