September 17, 2012

, New York

HEWLETT-PACKARD THINKS A NEW LOOK WILL DO IT?

posted by Francis_McInerney

New York — In the Wall Street Journal today, Hewlett-Packard CEO Meg Whitman opined that “something more beautiful” would do the trick for H-P’s foundering PC business.  Her problem is twofold.  One, she thinks that H-P is in the PC business when it is in the business of managing customer cloud access.  Two, she needs better core cash velocity from H-P’s operations.  If she doesn’t get both right, she is looking at the same problems facing Nokia and RIM, which got both wrong, and Dell, which got the first wrong and the second right.
Only one company ever understood the intersection …


September 13, 2012

, New York

EADS & BAE MERGER

posted by Francis_McInerney

New York — The big question about the proposed  EADS merger with BAE is not whether or not it is a good thing but whether it can be done at all.  The answer is only at a huge loss of value for a company already trading at less than six months of sales.
Nearly six years ago in the North River Adviser I took EADS to task for its abysmal management.  It was running 156 days of sales in inventory.  It now runs 168.  It then carried 78 days in payables; now it carries 83.  It carries  48 days in receivables …


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