re: HP Cuts 27,000 Jobs, Doesn't Fix Identity Problem
HP's balance sheet needs to be reviewed by a serious auditor. Their book value is 1.076, which makes no sense. Basically what that means is that if HP was shut down right now their tangible assets (inventory, property, equipment, accounts receivable, cash on hand, etc) minus liabilities would be worth almost as much as the company. In other words, keeping HP open or shutting it down is about financially equivalent for investors. The only reason a bunch of private equity/activist investors are not all over this company is that no one trusts HP's accounting. If it would be about a financial wash to shut it down, it should be hugely profitable to spin-off or sell off the divisions as they still are profitable. The asset values look strange though. For instance, they have inventory which is valued at several times their peers' inventories (3x IBM and 7x Apple). They have "other" assets which cannot be categorized that are huge (14x IBM, 2x Apple). These are likely going to be written down.
Even though it isn't part of the book value, where it really gets wild is in their intangible asset categories. Their "goodwill" (basically means brand equity, premiums over book paid for acquisitions and intellectual property) is an absurd $55 billion as of the latest quarter. Their goodwill is over twice the goodwill of IBM and Oracle. Apple has about $1 billion in goodwill! It will need to take a serious haircut. I cannot believe people are not losing their minds over HP's goodwill value.