The HP Wink-Wink Nudge-Nudge Scandal's Real Victims: The Shareholders
Of course, because Silicon Valley is possibly the least sexy of places, any whiff of a scandal involving a powerful CEO and a blond model/actress/cougar/contractor is going to get the lion’s share of the attention in the news coverage.
Even for a story in which everyone involved insists there was no funny business going on, that’s a perfectly natural reaction and I get the prurient interest.
Thus, the resignation of Hewlett-Packard (HPQ) head Mark Hurd and the private settlement of sexual harassment claims with consultant Jodie Fisher have morphed into a juicy summer potboiler, complete with claims and counterclaims, and even a cheesy demo reel (see below).
And also the odd appearance of Gloria Allred, lawyer to seemingly every celebrity mistress in California. Fisher said in a statement (also see below) she was no such thing, and was “saddened” by Hurd’s ouster.
Seems like crocodile tears to me, but today, when the markets open, we’ll see if any of it matters to investors or if they have moved on to trying to determine the next moves for the tech giant and its leadership.
Let’s hope Wall Street is less interested in gory details and more in business performance.
Still, already, the judgment on the Hurd debacle has hurt HP shareholders badly, shaving 9.7 percent off its shares, which closed down $4.50 at $41.85.
Encouragingly, the stock was up 1.8 percent in after-hours trading. But continued swirl around the company–especially about the large exit compensation package Hurd grabbed on his way out–could keep the stock in the doldrums for a while.
That’s too bad, since HP just put itself in the limelight with the acquisition of Palm and indications that it fully intended to compete in the fast-moving smartphone and tablet market with the webOS software platform.
Now, instead of turning up the public effort this year on making its consumer offerings more like Apple (AAPL) and Google (GOOG), the company is likely to be occupied answering questions that are not exactly on point.
As in: Who knew what and when and how was it expensed?
That means a very important message that HP needs to be getting out in the months ahead is not likely to break through for a while.
And that is why it is critical that HP’s board–which seems to have acted unusually swiftly and decisively with regard to Hurd’s missteps–move even faster to install a credible CEO at HP, especially one who can get everyone off the current meme and back onto the challenges facing the business.
In fact, much as Hurd did when he replaced Carly Fiorina in 2005 and quickly began to clean up her obvious mess. Except for a few bumps, the stock rebounded in his tenure, which was marked by stability and, well, dullness.
In a statement Hurd made as he stepped down late last week, he said:
“I realized there were instances in which I did not live up to the standards and principles of trust, respect and integrity that I have espoused at HP.”
Apparently not. Now shareholders are about to find out the price of his failure.
Until then, here’s Fisher’s demo reel video and statement, as well as the classic “Nudge, Nudge” skit from Monty Python: