Stay away from Hewlett-Packard right now, Fast trader Guy Adami Thursday.
That was his knee-jerk reaction after hearing the news that H-P planned to a to spin off its PC business and aquire British software maker Autonomy Corp. for $10 billion.
It was the the decision to jettison the personal computer business that generated the most chatter on the floor Thursday.
While on the surface it seems like the move with transform H-P into a company more like IBM , the “Fast Money” traders were cautious about getting into the name right now.
Zach Karabell cautions that you could be caught in a tech trap if you buy H-P. He thinks it falls into the same camp as Cisco , Dell and Nokia .
“We’ve actually watched a bunch of really large cap tech companies be caught on the wrong side of an inflection point and it is incredibly difficult to turn them around,” he said. “The only really massive turnaround story you can point to for this is IBM.”
Karabell thinks we’re not done to the downside.
Guy Adami is also not jumping into H-P on the news. He suggests waiting at least until the computer maker announces earnings after the bell Wednesday.
“Let them report,” he said. “Let’s see what they say. Let the dust settle and then if you want foray into HPQ be my guest, but I’m saying staying away right now.”
If you feel you have to get in on it, Patty Edwards thinks options is the way to go to limit your downside risk.
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Trader disclosure: On Aug 18, 2011, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders; Adami Owns (AGU); Adami Owns (C); Adami Owns (GS); Adami Owns (INTC); Adami Owns (MSFT); Adami Owns (NUE); Adami Owns (BTU); Karabell owns (AAPL); Karabell owns (GOOG); Karabell owns (GS); Karabell owns (IBM); Edwards owns (PM); Edwards owns (FXC); Edwards owns (XLK); Steve Grasso owns (AMD); Steve Grasso owns (ASTM); Steve Grasso owns (BA); Steve Grasso owns (BAC); Steve Grasso owns (C); Steve Grasso owns (D); Steve Grasso owns (JPM); Steve Grasso owns (LIT); Steve Grasso owns (LPX); Steve Grasso owns (LVS); Steve Grasso owns (MAR); Steve Grasso owns (MHY); Steve Grasso owns (NDAQ); Steve Grasso owns (PFE); Steve Grasso owns (PRST); Steve Grasso owns (UAL); Steve Grasso owns (XHB); Steve Grasso owns (XLB); Steve Grasso owns (XLI); Najarian owns (CSTR) call spreads; Najarian owns (TGT) call spreads; Najarian owns (GLD) call spreads; Najarian owns (WFC) call spreads
For Zach Karabell
Rivertwice Capital owns (IBM)
Rivertwice Capital owns (TGT)
Rivertwice Capital is short (GLD)
Rivertwice Capital is short (XLF)
For Patty Edwards
Trutina Financial owns (GOOG) For Clients
Trutina Financial owns (AMZN) For Clients
Trutina Financial owns (AAPL) For Clients
Trutina Financial owns (C) For Clients
Trutina Financial owns (EBAY) For Clients
Trutina Financial owns (MSFT) For Clients
Trutina Financial owns (GLD) For Clients
Trutina Financial owns (SLV) For Clients
Trutina Financial owns (PGM) For Clients
Trutina Financial owns (PM) For Clients
Trutina Financial owns (BMO) For Clients
For Steve Grasso
Stuart Frankel & Co and its partners own (AAPL)
Stuart Frankel & Co and its partners own (CSCO)
Stuart Frankel & Co and its partners own (CUBA)
Stuart Frankel & Co and its partners own (GERN)
Stuart Frankel & Co and its partners own (HPQ)
Stuart Frankel & Co and its partners own (HSPO)
Stuart Frankel & Co and its partners own (MET)
Stuart Frankel & Co and its partners own (MSFT)
Stuart Frankel & Co and its partners own (YHOO)
Stuart Frankel & Co and its partners own (RHT)
Stuart Frankel & Co and its partners own (MET)
Stuart Frankel & Co and its partners own (MU)
Stuart Frankel & Co and its partners own (NYX)
Stuart Frankel & Co and its partners own (PFE)
Stuart Frankel & Co and its partners own (PRST)
Stuart Frankel & Co and its partners own (SDS)
Stuart Frankel & Co and its partners own (UAL)
Stuart Frankel & Co and its partners own (XRX)
Stuart Frankel & Co and its partners are short (QQQQ)
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