Palo Alto Weekly

News - August 13, 2010

HP stock tumbles after CEO scandal

Hurd resignation leads to personnel, stock fallout

by Gennady Sheyner

Last week's forced resignation of HP Chief Executive Officer Mark Hurd has dropped the company's stocks by more than 10 percent, drawn vehement criticism from Oracle CEO Larry Ellison, and prompted Hurd's top aide to step down this week.

According to Fortune, aide Caprice Fibres McIlvaine resigned from her position Monday, three days after her boss stepped down as the CEO of the Palo Alto-based computer giant. McIlvaine, according to the report, worked in communications before she became Hurd's assistant and was a "chief conduit" in the hiring of consultant Jodie Fisher, who filed a sexual harassment claim against Hurd.

The Palo Alto-based computer giant has been in the spotlight since last Friday, when HP announced that Hurd was stepping down after the company investigated the claim by Fisher, a former actress whom he hired to assist with marketing. The company concluded that Hurd didn't sexually harass Fisher, but the board asked him to step down because he falsified expense reports to cover the reported personal relationship between him and Fisher.

The company's stocks, meanwhile, have plunged by more than 10 percent since last Friday, when they were traded at about $46 a share. After dropping sharply early this week, the company's stock has largely stabilized and traded at about $40 a share as of Thursday afternoon.

Fisher said in a public statement this week that she "never had an affair or an intimate sexual relationship" with Hurd and that she resolved her claim against Hurd privately and without litigation.

Ellison, meanwhile, sent an e-mail to the New York Times on Monday blasting HP's board of directors for forcing Hurd out. Ellison, who is a friend of Hurd, wrote that the company "just made the worst personnel decision since the idiots on the Apple board fired Steve Jobs many years ago."

"In losing Mark Hurd, the HP board failed to act in the best interest of HP employees, shareholders, customers and partners," Ellison wrote.

Staff Writer Gennady Sheyner can be e-mailed at gsheyner@paweekly.com.

Comments

Posted by Larry, a resident of College Terrace
on Aug 12, 2010 at 11:08 pm

Larry Ellison knowns that those sexual harassment lawsuits are easy enough to beat when you have a top-of-the-line legal team and an unlimited defense budget.


Posted by wish I had some money to invest, a resident of Meadow Park
on Aug 13, 2010 at 5:41 am

Wow...I guess now is the time to buy!

wish I had some cash...


Posted by HP shareholder, a resident of Palo Alto Hills
on Aug 13, 2010 at 8:48 am

Ellison is right, they should have kept Hurd, sensored him, and allow
him to lead HP to a bigger & more profitable company. Now HP, shareholders, employees have to follow the "other leaders"..


Posted by Sharon, a resident of Midtown
on Aug 13, 2010 at 10:28 am


HPQ is not alone

Cisco stock plunges 10 percent after CEO sees 'unusual uncertainty'

When Cisco Systems CEO John Chambers speaks, Wall Street listens. And when Chambers becomes cautious about the economic recovery, investors react -- as they did Thursday, causing Cisco's stock to plunge by nearly 10 percent.Web Link


The reality is that we are in a double dip recession---if Iran is attacked we will plunge into a global economic depression.


Posted by Ronald L., a resident of Downtown North
on Aug 13, 2010 at 11:25 am

Had Larry Ellison founded the company, I might care what he thinks.
Fortunately, HP was founded by two men who insisted the company
aspire to the highest ethical standards in the business. The board
was right to let go of Mark Hurd.


Posted by Fox News, a resident of College Terrace
on Aug 13, 2010 at 11:28 am

The main reason for the current economic slump is relentless whining on Fox News. As Rush Limbaugh says, the easiest way to defeat Obama is to ruin the country then blame it on him.


Posted by FISHy, a resident of Another Palo Alto neighborhood
on Aug 13, 2010 at 11:57 pm

The whole thing is FISHy. Why would Hurd pay her off and then she sue for sexual harassment? How could Jodie state that she didn't want him fired? There was some planning somewhere along the way. We aren't seeing all the facts. I think she wanted the fame and he wanted out or the Board wanted him ousted and grabbed for anything to get him out.


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