Hewlett-Packard’s novel CEO Meg Whitman would soon take the decision of spinning off their personal computer unit line by 2012 and till the time, he wants to make some serious calculations about benefits the company could derive.
As per the new piece, published in the Wall Street Journal, experts have revealed that if the company goes for spin off option rather than selling it out, the deal would not give them desired results as ‘cost of spinning off the unit might outweigh the benefits’. Decision would be really a hard nut to crack, for Whitman as his predecessor Leo Apotheker was in favor of spin off as the PC business has given them the benefit of $40.1 billion, which is an amount that could make even a wise person to rethink his decision. Earlier, HP got an additional $2 billion in profits during last fiscal year.
Actual problem in spinning off the business lies in the HP’s bargaining power, which it has to do with its part makers and its failure could put the HP’s supply in problem, which would result in less profits and ultimately less production.
Whitman was of the view: “If you lose purchasing power and other advantages, then a spinoff isn't worth it”. Now everything depends on whether he goes with his predecessor’s advice or with experts’ prediction.












