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HP Reportedly Moving to Dump Léo

HP’s stock, down about 47% in the last year, immediately spiked 8%

Told ya so. Told ya so.

Bloomberg and the Dow Jones blog All Things Digital reported simultaneously Wednesday morning that the HP board was meeting - in an unscheduled two-day meeting, mind you - to consider dumping CEO Léo Apotheker. The New York Times quickly picked up the chant.

HP's poor abused stock, down about 47% in the last year, immediately spiked 8%, a reaction that may help persuade the board that it's on the right track.

We, however, hear it's a fait accompli. The board reportedly decided it can't wait until HP closes its year on October 31 and has to move now. A proposed class action suit and three other derivative lawsuits filed over the hash Léo's made of things have supposedly put a gun to its head.

The would-be class action suit charges that "comments by CEO Léo Apotheker - concerning the company's earnings expectations, the importance of its personal computer business and plans to move ahead with devices running the webOS operating system - gave a vastly different indication of actions HP took on Aug. 18, when it killed the webOS hardware business and announced plans to spin off the PC business and spend $10 billion to acquire Autonomy."

If and when Léo goes, he won't go alone. CFO Cathy Cathie Lesjak, whose sales forecasts Léo had to slash three times, will reportedly go with him. And there may be others.

The game plan has changed again. The board is reportedly back to the idea of putting ex-eBay CEO and failed gubernatorial candidate Meg Whitman in to replace Léo rather than shadow CEO and non-executive chairman Ray Lane. At least Whitman, who may only be an interim appointee, shouldn't be a red cape to Oracle's bull. Of course, given her consumer Internet background, she might make more sense if HP wasn't spinning off its giant PC business and shuttering its webOS operation. She has no hardware or enterprise software experience.

Bloomberg, which called the Whitman scenario one option, reported separately that the board is also reconsidering the whole PC spin-off idea figuring now that it wasn't investigated enough.

Whitman joined the HP board in January as part of an overhaul orchestrated by Lane and Apotheker. She also joined Kleiner Perkins, where Lane is a partner, as a part-time strategic advisor although her track record as an acquisition spotter is mixed. She did after all wildly overpay for Skype.

Shareholder advisor Institutional Shareholder Services Inc (ISS) told HP stockholders not to approve the reconstituted board because it was stacked with friends of Léo who - by HP's own rules, let alone common sense - wasn't supposed to have a hand in picking them and did so as part of an ad hoc committee established to identify potential directors.

Léo was tapped to replace ousted HP CEO Mark Hurd, a divinity to Wall Street, last September 30 but he didn't officially start until November 1 so he's lasted three months longer than he did as sole CEO of SAP, which also showed him the door. The market has never had confidence in him but his strategy shifts last month, the way they were communicated and their timing have been utterly jarring.

More Stories By Maureen O'Gara

Maureen O'Gara the most read technology reporter for the past 20 years, is the Cloud Computing and Virtualization News Desk editor of SYS-CON Media. She is the publisher of famous "Billygrams" and the editor-in-chief of "Client/Server News" for more than a decade. One of the most respected technology reporters in the business, Maureen can be reached by email at maureen(at)sys-con.com or paperboy(at)g2news.com, and by phone at 516 759-7025. Twitter: @MaureenOGara

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