HP's stock price took a huge hit on Friday after announcing on Thursday afternoon it was dumping its webOS business. CNBC.com shows that HP's stock on the New York Stock Exchange plunged just over 20 percent on Friday and was likely one of the big reasons why the NYSE was 1.73 percent lower today overall. The stock price was the lowest HP has had in six years. In addition to discarding its webOS business, HP is also considering a sale or a spin off of its huge PC business, which is still the single biggest seller of PCs worldwide.
Both of these moves by HP are clearly spooking investors who might feel that the company has now lost its way. The Wall Street Journal reports that Needham analyst Richard Kugele has downgraded HP to underperform, saying, "HP may have eroded what remained of Wall Street's confidence in the company and its strategy. We can't help but get the sense that these dramatic moves are being made from a position of weakness and not strength, and have an air of desperation to them."
In the near term analysts believe consumers might be thinking twice about purchasing an HP PC for things like school, college or for the holidays due to HP's uncertain future in the PC business. However the company is still holding on to its server business . It is still the biggest seller of servers in the world, selling more than the next two highest server providers, Dell and IBM, combined.