HP Slams Dell's Decision to Go Private

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HP has responded to Dell’s decision to take the company private with a statement criticizing the move. However, some observers say that HP has little room to criticize others since it is also in a difficult situation.

HP’s official statement reads, “Dell has a very tough road ahead. The company faces an extended period of uncertainty and transition that will not be good for its customers. And with a significant debt load, Dell’s ability to invest in new products and services will be extremely limited. Leveraged buyouts tend to leave existing customers and innovation at the curb. We believe Dell’s customers will now be eager to explore alternatives, and HP plans to take full advantage of that opportunity.”

Writing about the statement, CNNMoney’s Julianne Pepitone commented, “True? Yeah, maybe. But it’s rich coming from HP, which is traveling its own ‘very tough road’ and is still in the middle of its own transition. HP shares have plummeted 66% over the past three years as the company struggles to figure out its future. And HP isn’t even a year-and-a-half removed from the brief but disastrous reign of Leo Apotheker.”

Computerworld quoted Dan Olds, an analyst with the Gabriel Consulting Group , who said, “HP’s first salvo against Dell was remarkably vicious. I don’t think this kind of snarkiness will help HP in the market, but it does show that HP is going to do its best to take advantage of the situation. I’d expect to see HP wooing Dell corporate customers with sweet deals over the next few months.”

The Wall Street Journal’s Juro Osawa noted that Lenovo’s response to the Dell privatization was much different, writing, “Lenovo, in its statement on the Dell deal, said that ‘the financial actions of some of our traditional competitors will not substantially change our outlook.’ Still, the statement – which Lenovo offered as its comment on Dell’s announcement — didn’t even contain the word ‘Dell’ in the text. ‘Our strategy is clear, our financial position is healthy and our business is very strong — so we are focused on our products, customers and overall execution rather than distracting financial maneuvers and major strategic shifts.’ The statements from HP and Lenovo may also reflect their different positions in the PC market: While HP has been scrambling to redesign its strategy amid sluggish global demand for PCs, Lenovo has enjoyed growth in sales and profits thanks to its strength in China and emerging markets.”