Hewlett Packard and Bank of America, two stocks that have recently taken dives in the stock market, present a "shocking parallel," said Jeffrey Sonnenfeld, senior associate dean of the Yale School of Management.
Both H-P and Bank of America have CEOs who inherited problems from predecessors who were "huge failures," and had "horrible boards" previously, Sonnenfeld said. The two Dow Jones Industrial Average components also "both have burning platform issues, with a very short time period to respond to them" and are in highly fluid industries, he said.
Sonnenfeld added that he thinks H-P Chief Executive Leo Apotheker's decision to move out of the personal computer business and instead focus on developing enterprise software makes sense for the company. Under former chief executive Carly Fiorina's tenure, H-P merged with Compaq—a move Sonnenfeld described as a "misguided path that cost them quite a bit of time."
In an interview with CNBC Monday, Fiorina defended the Compaq merger.
"The merger was an unqualified success in its execution and in delivering what we promised to shareholders, which was a leading PC business, a leading server business, a leading services business, and continuation of leadership in the printing business that created a diversified portfolio that weathered all storms," she told CNBC Monday.
Yale's Sonnenfeld said he thinks H-P moving into business software by purchasing British software company Autonomy makes sense for the company.
"Unfortunately, it is hard, and it is a little bit of a disorienting period for analysts and for employees as you're going through a divestiture," Sonnenfeld said.
Sonnenfeld cited Pepsico and Tyco as two examples of companies that were able to successfully spin off businesses.
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