Bright Past, Dim Future: An American Icon at Risk
Once a thriving and innovative company, after hearing from the CEO, Jim Cramer worries a classic American success story may not have a happy ending.
On Thursday, Hewlett Packard CEO Meg Whitman talked with the gang at Squawk on the Street, a conversation which the Mad Money host described as ‘painful.’
“Her reality was certainly distorted in my opinion,” said Cramer. “Maybe because debate talk was in the air, maybe because Whitman tried and failed to be governor of California, but Whitman came off as a politician, unwilling to answer any question about how she could save Hewlett –Packard from going the way of other hardware companies that couldn’t keep up.”
Cramer added that Whitman didn’t answer how she could stop Apple from eating away at HP’s market share nor did she didn’t make a real case for why a hardware model still worked.
“She made no case for owning the stock whatsoever,” insisted Cramer, “and ruled out a wait until next year turn by saying that it will be 2014 before we see any positive results from the company.”
Cramer worries that Hewlett- Packard, a truly American icon could suffer the fate of so many other icons that failed to stay relevant.
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“There are no rights for companies to exist just because they have a long history of existing,” he said. “The rolls of tech companies are littered with castoffs that thought they had a right to exist, companies like Wang, Digital Equipment, Data General, Burroughs, Control Data, Univac, Nortel.”
“They were storied. They were valuable. And then they were irrelevant and gone or subsumed for next to nothing."
Cramer sees HP’s current situation as similar to another storied company – Kodak.
“Kodak used to be one of the most important tech companies in the world, a financial powerhouse with the best cameras, the best printing technology.”
But, over the years Kodak either sold off business units or failed to leverage them properly, until the 131-year-old film had tofile for bankruptcy protection.
As for Hewlett Packard, which was founded in 1939, “I had hopes that I might be able to see a Whitman vision. Instead reality got distorted but in a bad way not a good one,” said Cramer.
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