Ounce of prevention

30 August 2010 By Robert Cyran Follow @rob_cyran

Like many tech companies, HP is sitting on a large cash pile. The company’s bidding war for 3PAR raises fears this hoard could be squandered. Promising to repurchase $10 bln of stock soothes shareholders. An ounce of prevention refraining from such battles would be better.

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HewlettPackard's board has authorized the repurchase of an additional $10 billion of company stock. The computer company had $4.9 billion remaining on an existing buyback plan at the end of the quarter. It expects to buy at least $3 billion of shares by the end of the current quarter.

HP's stock has lost 24 percent of its value this year. The company is currently looking for an executive to replace Mark Hurd, who was forced out by the board over alleged indiscretions involving expenses and an independent contractor.

HP had $14.7 billion of cash on its balance sheet at the end of the last quarter. The company is currently in a bidding war for data storage group 3PAR. HP's latest offer is $2 billion, net of cash, to acquire the company.

HP statement

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