October 01, 2010, 11:20 AM — It seems Wall Street isn't particularly enamored of Hewlett-Packard's choice for its new chief executive.
In early trading Friday, shares of HP (NASDAQ: HPQ) were down $1.33, or 3.2 percent, to $40.74.
HP announced late Thursday that it had chosen former (and short-time) SAP AG CEO Leo Apotheker to succeed Mark Hurd, who left the company in early August under a cloud of controversy.
Apotheker, 57, is a native German who spent two decades at business software vendor SAP before ascending to the corner office in April 2008. He was out by February of this year, blamed for a downturn in the company's financial performance following his decision to raise customer fees for software maintenance and upgrades.
The initial investor reaction undoubtedly is being influenced by criticism of Apotheker's selection from technology industry analysts and observers. Here's what some are saying:
Paul Hamerman, Forrester Research: "SAP's customer relationships suffered badly and so did employee morale while (Apotheker) was there, so this is a bit of an odd choice by HP." (via Associated Press)
Brian Marshall, Gleacher & Co.: "I thought it would be difficult for HP to hire an outsider and have its stock to go down, but this board seems to have found a way." (AP)
Thomas Wailgum, CIO: "Very early speculation is that HP has designs on enterprise application plays in the near future, perhaps even SAP itself as an acquisition target, and Apotheker can help make that happen. If that is the case, then I think HP has made the wrong hire."
M. Eric Johnson, Dartmouth business professor: “He spent 20 years at SAP, which is a German company with a pretty rigid culture. ...The bet [H-P has] got to be making is that enterprise software is where they want to go further. But what that means for a giant hunk of their business that is not enterprise software is a mystery.” (via Wall Street Journal)