Mark Hurd Gets New Job at Oracle, HP Miffed

Those who have casually followed the HPQ-Oracle-Mark Hurd-sexual harassment imbroglio may be interested to hear it has taken an even more amusing/bizarre turn. Here's a quick recap of the history:

• Everybody Loves HPQ's CEO Mark Hurd.
• Mark Hurd settles a sexual harassment claim with a former HPQ consultant/employee whose job description was at best murky.
• HPQ board gets mad because, um, this is a bit embarrassing. Why is our CEO sexually harassing our employees? Wait, what did she do for us? What are these "expenses"? She used to be an actress? On reality TV??? Then she worked in real estate? Oh right, we hired her to be a greeter/escort at our fancy parties. Because we need one of those to sell our lousy printers.
• Mark Hurd "resigns" (aka given boot by board) and given massive severance payment.
• Everyone is shocked that CEO is fired, especially the harassee (didn't mean to get the guy fired, thought it would be all hush hush)
• Except for Larry Ellison who apparently doesn't care if his employees sexually harass (or whatever) other employees, as long as they "create shareholder value."
• Mark Hurd gets job at Oracle.

Which brings us to present day: HP's board is now really pissed off and is suing to block Mark Hurd from joining Oracle. I mean he's going to bring all of those trade secrets over to Oracle. And now Oracle is going to start making lousy printers too and it's going to eat into our monopoly and we won't be able to get away with selling printers that run out of ink a week after purchase, then charging $50 a cartridge for another week's worth of ink! Oh No!

Here are a few thoughts I'd like to share with HPQ's board:

• Next time you fire someone for cause, don't pay them a $35 million severance. Trust me, you'll feel better when they immediately go to a competitor.
• According to the FT, there was no non-compete clause, but something about not releasing trade secrets to competitors. Nonetheless, suing will likely be as big of a waste of money as his severance.
• Hire someone who will figure out why my two week old printer keeps giving me error messages instead of printing.

YHOO and HP Goose the Market, Financials Slap It Back Down

Jerry Yang has announced he will step aside and allow Yahoo to seek a new CEO.  This is probably one of the best decisions Mr. Yang has made for the company in a very long time.  His decision to scorn Microsoft's $40 billion bid for Yahoo will go down in history as one of the worst made by a non-financial company CEO.  That statement is not in hindsight.  It was patently clear at the time to anyone with half a brain that the company should've accepted Microsoft's bid.  I don't attest to have more than half a brain but you can read my comments mocking the idiot analysts at the time who kept claiming how badly Microsoft (holder of multiple billions in cash) needed Yahoo ($18 stock at the time with declining prospects) and how Mr. Softy would certainly raise his bid to win his prize.  Microsoft may or may not be back now that Mr. Yang is stepping down, but it is unlikely to bid much of a premium in this market.

In the surprisingly good new department, Hewlett-Packard actually raised guidance for the fourth quarter.  I know, I can't believe it either.  But good news is rare these days, so the market will take what it can get.  

Futures were higher on the HP and Yahoo news, but the market is roughly flat in early morning trading as attention returns to battering the living stuffing out of financials.  Make no mistake, the financials deserve their battering.  Hank Paulson and Ben Bernanke are testifying on Capital Hill today with Sheila Bair in tow.  Mr. Paulson has noted that he does not intend to use any more of the TARP while in office, unless absolutely necessary (i.e. some bank or insurance company calling him at 3 am).  Since financials trade mostly on government intervention news, investors are hoping to figure out what the newly elected administration plans to do with the rest of the money and if some companies will actually make it until the new administration takes over in January without an injection of funds.  This explains why insurance stocks are getting pounded and why they are considering buying small savings and loans to access to more liquidity.          

Citigroup Seeks Advice From HP

In what is perhaps the most curious headline in the financial news today, Citigroup is asking HP for advice on reviving its fortunes. Apparently, Citigroup sees similarities between its current situation and HP's back in 2005 when Carly Fiorina, the former CEO was forced out and replaced by Mark Hurd. Although I only report what I read in the financial press, I can only surmise how the conversation went after Vikram Pandit dialed Mark Hurd's number:

Pandit: Hello Mark? This is Vikram Pandit.

Hurd: Who?

Pandit: Vikram Pandit, the CEO of Citigroup.

Hurd: I think you have the wrong number. This is Hewlett-Packard, the computer company in Silicon Valley.

Pandit: Yes, yes. I know. I want to talk to you about fixing some of the problems we're having with the bank.

Hurd: I don't need a loan or a new credit card.

Pandit: No, no. You misunderstand. I'm looking for advice on how to get through this difficult time without breaking up the company.

Hurd: Hmmmm. Did I mention we're a computer company?

Pandit: I know. I'm just looking for general strategy.

Hurd: Maybe you should introduce a new line of ink jet cartridges. The margins are great. Oh, wait. Nevermind. Forget I said that! The margins are terrible. You should maybe try to spin off a business or two? Then you could charge yourself some investment banking fees and book them as revenues!

Pandit: But you didn't spin anything off.

Hurd: True, true. Maybe what you need to do is telegraph the fact that you are fairly certain, although not entirely, that the credit crisis may possibly, although not definitely, be nearing an end?

Pandit: Oh yes! Yes of course! What should I say?

Hurd: Make a good sports analogy. Like we're entering the fourth quarter.

Pandit: I think Blankfein already said that.

Hurd: Have you tried baseball?

Pandit: Morgan Stanley's Mack already talked about being in the final inning.

Hurd: What about the third period of a hockey game?

Pandit: Nobody watches hockey. What if I just say we're more than half way through the credit crisis?

Hurd: Weak, but it's better than nothing.

Pandit: Would you be interested in making an investment in our esteemed firm?

Hurd: Um no. And stop sending me all those damn credit card offers.