Forbes Likes (+1) HP

The Think Billion$ blog, once again, is with or ahead of the curve with its thinking on HP (NYSE: HPQ), the Palo Alto, California computer company.

Forever remaining skeptical on most business stories from The Economist, Think Billion$ thought the socialist business magazine went a little over the top with its recent denouncement of Meg Whitman (The Economist Hates both Meg Whitman and HP).

Rich Karlgaard, publisher of Forbes and Silicon Valley insider, understands the dynamics of HP differently (Whitman Is Not Jobs, But HP Is a Buy. Forbes, December 19, 2011, p. 40):

"Even if you remain skeptical about Whitman, HP is a buy on the price. Consider that IBM and HP have comparable revenue numbers, yet IBM is worth $220 billion. Warren Buffett plopped $10.7 billion into IBM at this valuation. HP is worth $56 billion. It's dirt cheap. For all of HP's problems, the company still generates about $10 billion a year in free cash flow. A modest multiplier of ten times cash flow would get HP to $100 billion."

The Think Billions blog continues to wish Meg Whitman well at HP.

The Economist Hates both Meg Whitman and HP

What can one say when a "business" magazine (like The Economist) becomes far less a business magazine and far more like an entertainment news weekly which emphasizes the sizzle rather than the steak. One could say many things.

Sounding ever so much like shill advertising for or a regurgitated version of Jim Collins' Good to Great with strong warnings against charismatic corporate leaders, The Economist recently sounded off on Meg Whitman and the HP decision to bring her in as CEO [The Economist, October 1, 2011, p.74.]

Let us count the ways.

The Economist doesn't like what Meg did at eBay, doesn't like she lost the race for governor of California, just doesn't like her period.

Not once does The Economist recognize Meg Whitman's smart decision to review the decision to cancel the proposed sale or spin-off of its $40 billion PSG business. This decision was made, in haste, by the previous administration.

Not once does The Economist recognize the critical need for replacing the incompetent CEO, who had held the job for only 11 months, known as Leo Apotheker. Perhaps it is because Leo is a former European hero of the magazine, by way of as the CEO of SAP, the huge software company based in Germany.

 Sometimes software and hardware do not mix well.

Not once does The Economist recognize the need for sound business research.

The Think Billions blog wishes Meg Whitman well at HP.

Meg Whitman is taking a $1 annual salary for her position as HP CEO

Meg Whitman, Harvard MBA and the fourth wealthiest woman in the state of California with a net worth of $1.3 billion in 2010, might be taking a $1 salary, but she is getting more than enough compensation with stock options.

As reported by the LA Times:

Whitman was also awarded the option to buy nearly 2 million shares of HP stock, which if vested today would be worth nearly $45 million. As with many executive-level options packages, however, the shares won't vest immediately: Whitman won't be able to cash in at least 900,000 of them in until a year from now.