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Did HP Bilk Its Shareholders? 144

Posted by Soulskill
from the all-about-the-benjamins dept.
jfruhlinger writes "About a month ago, HP announced that it was getting out of the PC, tablet, and mobile phone business to focus on software services, at which point, rather predictably, HP's stock plunged. Obviously, HP's leadership had been working on this plan for some time before it was announced, which leads to the question: did they deliberately mislead their stockholders by not being more transparent? That's what a shareholder lawsuit against the company alleges. How the courts treat the suit could have interesting implications for how transparent public corporations need to be about future strategy."
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Did HP Bilk Its Shareholders?

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  • by Dyinobal (1427207) on Friday September 16, 2011 @02:39PM (#37423018)
    I thought getting information about such things from an insider and then acting upon it was considered insider trading? Has something changed in the last decade and we now operate under the assumption that such knowledge is okay and even required?
    • Re: (Score:2, Informative)

      by h4rr4r (612664)

      It's only insider trading if only you know about it and you are not supposed to. If HP says to the world "We are kicking some ideas around the office about get out of the commodity PC space.", then this would be a perfectly legal thing to use to evaluate their stock.

      • Re:Insider trading (Score:5, Informative)

        by bws111 (1216812) on Friday September 16, 2011 @03:07PM (#37423272)

        It's not if you knew about it and weren't supposed to, it's if you knew about and took action on that information, prior to the information being made public. Insiders obviously knew about the plan, but if they didn't use that information to buy or sell stock prior to the release of the information it is not insider trading.

        • by h4rr4r (612664)

          So if the HP exec making this decision, new it was stupid and he shorted HP just before the announcement that would be illegal?

          • by bws111 (1216812)

            Yes

          • by lgarner (694957)

            Absolutely. Whether it's stupid (which is still unknown) or not. Trading based on knowledge that is not public is "insider trading". And it doesn't need to be an executive [theregister.co.uk].

            Of course, remember that "publicly available" may not mean what you think it means. They don't have to advertise it, or put disclaimers on their TV commercials. Including a statement with their SEC or other financial filings is probably sufficient.

        • by Anonymous Coward

          It's interesting to note that canceling, nor not-canceling, a previously-scheduled future stock trade is not considered an "action" by the SEC. So you just schedule quarterly sales and quarterly purchases all the time, then cancel them most of the time, until suddenly you don't. (I'll just add this now to my own statement: [citation needed])

    • Re: (Score:2, Insightful)

      by funkatron (912521)
      Where have you been for the last 5 years?? Anything that helps banks to make money is a fantastic idea!!! The banks must always be profitable!!
    • by Anonymous Coward

      I think it is a classic case of the left hand not knowing what the right is doing. It takes a massive amount of money to design a new product, produce it, build inventory, distribute it, and launch it. The Pre3 was on the market in Europe for all of 24 hours before it was discontinued with all other HP webOS hardware. If that doesn't demonstrate that management was in their own little bubble, I don't know what does.

    • Re:Insider trading (Score:5, Interesting)

      by alexander_686 (957440) on Friday September 16, 2011 @03:27PM (#37423492)

      This lawsuit is not about insider trading. Insider Trading is a criminal case and this is not.

      This is a civil lawsuit. I want to say SEC Reg FD (Fair Disclosure), but after reading the article I am not so sure. But it's going to be in that universe. Basically, what the lawsuits says is that company announcements must be fair and tuneful – and that HP’s announcements that their PC and mobile divisions were doing fine (in the sense that they were going to be a ongoing division of the comapny) were a lie. After all you don’t want to buy a pig in a poke.

      I am not so sure how seriously I would take this. Back in the 1980’s a lot of companies were sued every time there stock dipped. Lawyers of the ambulance chaser type were always able to find some press release that could provide a fig leaf and then shake down the company. This kind of suit rarely gets far. (vast generalization– your mileage may very)

      • Remember when stock investments were speculative in nature? This is people crying about eating risk that they didn't understand. HP's PC division is profitable, and will continue to be profitable for the near term future. However, the management sees the downward trend, and they want to get out.

        Don't like it? Sell your HP stock. Plenty of others did. Think it's a good move? Buy HP. It's real cheap at the moment. That's what the stock market is all about.

    • Yes I believe that article seems to be implying that HP should of secretly warned their shareholders of this impending decision in the hope/knowledge that many of them would sell (which is insider trading).

  • by mfh (56)

    Yes.

    • by Threni (635302)

      Lol!Yes, they should have made the announcement before they made the announcement.

    • Re:Short Answer? (Score:5, Insightful)

      by NoNonAlphaCharsHere (2201864) on Friday September 16, 2011 @02:50PM (#37423112)
      Shorter answer: No. Should corporations (really management/boards) have to disclose when they're going to release a new product that's going to be the next iPhone (on the good extreme) or the next Matrix Revolutions (at the other extreme). And what time-horizon are people to use for this crystal-ball gazing? Wouldn't IBM's management have been equally culpable for their decision to leave the PC market? Or how about bet-the-company gambles? I think we probably already have enough "you should have....." lawsuits already.
      • Both "short answers" are wrong. It's not that clear cut.

        If HP's execs decided that they'd bail out of the hardware markets in January, but told their shareholders otherwise during the quarterly meetings in an attempt to keep up their stock price while they sold their own shares, then the shareholders have a case against them. If, however, leaving the hardware markets was merely one of many strategies being considered, and they didn't reach their final decision until recently (perhaps after the bombing of

        • If HP's execs decided that they'd bail out of the hardware markets in January, but told their shareholders otherwise during the quarterly meetings in an attempt to keep up their stock price while they sold their own shares, then the shareholders have a case against them.

          Of course. And so does the SEC. But there's a huge difference between criminal behavior and Monday-morning quarterbacking, which is more like what this civil action looks like.

          • by artor3 (1344997)

            A random Slashdotter's gut feeling about a case doesn't carry quite the same authority as a trial. I'll trust in the justice system to square this away, rather than trial by random underinformed disinterested strangers.

            By the way, why did you highlight "civil"? Do you have something against civil trials? Are you aware that the SEC also uses civil trials?

            • I highlighted "civil" because insider trading is a criminal offense, while having deep pockets and making yourself a target for fee-seeking, class-action lawyers is a civil offense.

              Look, I'm not a fan of HP's management or board, haven't been since Lou Platt. I'm just saying that if the board did something criminal, then they should be prosecuted as such. However, allowing a raft of class-action lawsuits because a stock price went down (temporarily?) isn't a smart way to run society, or a business. Many
              • by artor3 (1344997)

                having deep pockets and making yourself a target for fee-seeking, class-action lawyers is a civil offense.

                So the answer to my question is yes, you do have a problem with civil trials. God willing you'll never find yourself in a position where you need to be a plaintiff.

                If HP's directors intentionally lied to their shareholders in order to get more money for themselves at their shareholders expense, how can you possibly be okay with that?

                • Because that would be a criminal case. See Crazy Eddie. There is a case where the defendants released information that was false to pump up the stock price as they dumped their stock.
                  http://en.wikipedia.org/wiki/Crazy_Eddie [wikipedia.org]

                  Here, HP is being charged with being incompetent. (I have not seen anybody saying that the HP management dumped their stock – let me know if I am wrong.)

                  Part of the issue here is that this type of suit has a bad reputation. It’s not just Monday quarterbacking. Much like paten

            • I'll trust in the justice system to square this away, rather than trial by random underinformed disinterested strangers.

              Isn't that what the "justice" system is - "trial by random underinformed disinterested strangers"?

            • by Compaqt (1758360)

              Really? I'd trust a random Slashdotter (even high UID!) before trusting the "justice" system.

              "Justice" system is a misnomer. I wonder how or why they came up with that one. It's actually the legal system. The point is not to provide justice. The point is to go through a process defined by the law, precedent, court rules, and the financial means of the parties.

    • by bws111 (1216812)

      How so? I bet not one investor is involved in any of these suits. Real investors are interested in the success of the company. Whether or not these actions are good for the company are yet to be seen. These suits are no doubt brought by gamblers (oops, I mean speculators) who are pissed that their horse stumbled on the way into the gate and they didn't have time to change their bets.

      • by mfh (56)

        The board bilked shareholders by not living up to their fiduciary responsibilities. As managers of a company they needed to better plan the aftermath of their poor results.

        First of all, nobody invests in HP because of anything HP does that is not related to the PC market. Moving out of that market was a direct screw-up by HP executives. Failing to go after iPad properly was also a screw up.

        HP drove its own stock down so that certain people could pick up stock at a low price. There is no other explanation fo

        • by bws111 (1216812)

          Not living up to fiduciary responsibilities? How so? Their responsibility is to maximize their profits. How much has their profit suffered because of this announcement? Since it hasn't even happened yet you have no way to know, so any claim of not meeting their responsibilities is pure speculation.

          The PC market is a crappy market to be in. It is a low margin, commodity market with pretty much zero chance of profit growth. Companies regularly exit businesses (even ones they were dominant in) that are

  • And the alternative to what they did would be "We're exiting the PC, Tablet and Mobile Phone business but we have no plan to make this happen yet, check back later".

    Which do you think is worse for the stock price?

    • Re:Alternative (Score:4, Insightful)

      by Attila Dimedici (1036002) on Friday September 16, 2011 @02:55PM (#37423158)
      The question becomes how far in advance of making the announcement had the decision been made and, more importantly, did any executives involved in delaying the announcement receive elevated bonuses because the stock had not yet taken the hit from the announcement (even though the decision was already made). If the decision was delayed for the purpose of ensuring that certain executives would receive a larger bonus than they would have if it was announced sooner, those suing have a case. Of course they would still have to prove that this actually was the reason for the delay.
      • by dave562 (969951)

        Of course they would still have to prove that this actually was the reason for the delay.

        Enter electronic discovery. Expect HP to be giving up all of their emails involving any communication with the board for at least the last fiscal year.

        • by rsborg (111459)

          Enter electronic discovery. Expect HP to be giving up all of their emails involving any communication with the board for at least the last fiscal year.

          I have done ediscovery and with all sorts of attorney-client and work product privilege and redaction of non-relevant details, you can expect that at most 10% of the total emails get released. A good ediscovery consultant can get upwards of 95% content reduction for discovery purposes.

      • Bingo. The issue is with timing / vs / incentive. The decision makers themselves would have been 'blacked out' regarding their stock holdings, so the legal issue would be with the announcement's timing, not with the decision itself. That said...HP's legal team was, without doubt, well involved. Good luck proving anything nefarious went down in court.
        • Anecdotal evidence I've heard is that Leo is even less-liked than Carly was, especially with this announcement. That dislike may extend well into the upper reaches, as since the announcement, various senior managers and vice presidents have said some very scattered things about the future of the division and what will happen with webOS. Either there is very poor communication at the top, there is no real strategy and HP's executive board is winging it, or someone is actively working to undermine someone e

      • by TubeSteak (669689)

        The question becomes how far in advance of making the announcement had the decision been made and, more importantly, did any executives involved in delaying the announcement receive elevated bonuses because the stock had not yet taken the hit from the announcement (even though the decision was already made).

        This has nothing to do with the lawsuit.
        HP Executives were making material statements about the direction of their company.
        If they *knew* there was going to be a change in direction, but did not include that in their discussion of the company's future,
        that will more than likely qualify as materially false and misleading statements.

        Step 1. Plan to sell off WebOS
        Step 2. Tell shareholders that WebOS is the future of HP's strategy
        Step 3. Announce you're selling WebOS
        Step 4. Get sued for making materially false

    • by azadrozny (576352)
      I agree. Company managers should have some ability to work out their strategy before making it public. It would have been worse if they made their intent known without revealing their whole plan. In general investors like predictability, waffling should be left to the politicians.
    • by wjousts (1529427)

      Exactly this, should all half-assed and not yet fully formed ideas immediately be made public? If the CEO is taking a piss and happens to say "man, this PC business ain't worth shit", do the stockholders need to know? I'm sure the management at HP discuss all kinds of ideas and plans that never go anywhere. They don't need to be announced until they are official agree upon and become the strategy.

      At some point they'd have to make the announcement and the stock would tank as soon as they did. So it's better

  • And the SEC watches (well, excepting Bernie Madoff). If any of HP's officers is found to have profited using inside knowledge, they will have to give up their profits. And maybe pay a fine as well.

    Transparency isn't an issue. Companies plan strategies without informing their shareholders all the time.

  • I somehow doubt he would be suing if the stock price went up.
    • The lead plaintiff would change, but the lawyer behind this would still be suing on behalf of all those aggrieved parties who sold their stock before the announcement and therefore lost money when the stock rose later. If only they had known how spinning off the PC business would unlock shareholder value, they could have gotten what was rightfully theirs! Or something.

      These shareholder lawsuits are little more than a shakedown. The lawyers (both sides) make out like bandits, the lead plaintiff gets a lit
  • ... where the only winners are the lawyers.

    Seriously, if the executive team would have announced it too early, and they changed their mind, there would be a lawsuit. Instead, they announce the new strategy when they're sure they want to do it, and now they get sued because they should have announced it earlier. Besides, how much earlier were they supposed to announce that they were going to ditch WebOS? The day after the acquisition? This just smells like sour grapes from some investors who didn't expect th

    • I doubt any actual investors involved in this lawsuit at this point. It sounds like it's being filed 'on behalf of' a class, and the only person actually involved at the moment is the lawyer.

      • The lawyer still needs one actual plaintiff to start the process. That said, I'm still left to wonder what excactly the point of a shareholder lawsuit is. Who are they suing? Themselves? Any monetary damages woudl be self defeating, and if they wanted to oust the board of directors, there's already a process for that. Maybe someone can explain what I'm missing here.

    • Quite frankly, most shareholders should just shut up when it comes to corporate governance.

      agreed. i'm glad all the enron shareholders just kept quiet and didn't interfere. this allowed enron to focus on long term strategy. oh wait ...

      • See the qualifier in that sentence? It starts with an m. It means that I'm aware that some shareholders do pay attention and do file valid lawsuits. This isn't one of them, and the majority of them aren't either.

        • hi there,

          you can't stop people from filing invalid lawsuits, because you don't know they are invalid until they get in front of a judge and the evidence is presented. or would you apply some sort of magically future-scope where you can tell the outcome before you even allow the suit to be filed?

          • Do I know that the lawsuit is frivolous to the degree required by law to result in an acquittal? No. Do I know that the lawsuit is frivolous based on a variety of heuristics, bullshit meters and slippery slope possibilities? Yes.

            In other news, we make lots of decisions based on information that wouldn't stand up in court, because otherwise, we'd make almost no decisions whatsoever (see for example how you pick out socks to buy - there are some fun clinical cases about how people are incapable of going shopp

            • Do I know that the lawsuit is frivolous based on a variety of heuristics, bullshit meters and slippery slope possibilities? Yes.

              you my friend are the reason we have the legal system we do. people that think they are somehow smart enough to decide all manner of issues based on anecdotal evidence of hearsay.

  • by roman_mir (125474) on Friday September 16, 2011 @03:00PM (#37423198) Homepage Journal

    HP doesn't care about its investors for the same reason CEOs get pay that is too high [slashdot.org] and HFT continues [slashdot.org]. Of-course other reasons for not caring about investors is limited liability that the top management of corporations enjoy because government created this moral hazard in the first place. There shouldn't be such a thing as government provided limited liability to corporations.

    But the reality is that in the market that is promoted with all this inflation and destruction of investment and savings, there are no investors, the market is turned into a casino, everybody is gambling on price of stock, not investing into a business for long term.

    There should not be any government protections to people, who are investors except that contract law needs to be upheld by courts, that's all there is to it, but with all the government destruction of economy, there is so little competition and so little choice of where to invest, that people are stuck with the current casino, seagull management and gambling.

    Can investors sue the Federal reserve for DESTROYING their US dollar denominated savings and investments? After all, the US federal reserve is causing money destruction that is causing the federal reserve notes to lose over 10% of value per year.

    • by schklerg (1130369)
      I'd laugh if you weren't right. If only I had mod points...
    • After all, the US federal reserve is causing money destruction that is causing the federal reserve notes to lose over 10% of value per year.

      So you mean to tell me that my junk 88 Ford Bronco II with 253,XXX miles on it is appreciating against the dollar instead of decreasing in value. Please wizzard of the finance tell me where I can invest my money so that I will get an inflation beating return since obviously if I owned any TIPS [treasurydirect.gov] I should be seeing an interest rate above 0.25% for a 3 month bond [treasurydirect.gov], or a 1 year treasure bill with a rate above 0.102% [treasurydirect.gov]

      • by roman_mir (125474)

        TIPS? OUCH! Did I forget to mention that government reported CPI numbers are cooked? They are reversed engineered to make it look like inflation is tiny. BTW., they are about to revise how they are cooking the CPI numbers to make it seem even smaller.

        The real inflation is north of 10%, I count [slashdot.org] closer to 13%.

        Here is what I think [slashdot.org] of the 3 month t-bills and inflation that is created to maintain them.

        And if you want to know my advice on investment, all you have to do is look at years and years of my comments h

        • by tjb (226873)

          The real inflation is north of 10%, I count [slashdot.org] closer to 13%.

          No, it is not [mit.edu]. Or is MIT in on the scam too?

          • by roman_mir (125474)

            In my top comment I gave a link, which provides data that MIT is not collecting, because MIT is looking only at final goods sold in USA, and since USA exports the inflation to other nations, who buy US dollars and debt, and those other nations produce the stuff USA consumes (53 Billion USD/month trade deficit), it's those other nations that suffer the rising prices immediately, while USA is kept isolated from the very inflation it creates. However the consumer goods are now beginning to reflect the real inf

    • by timeOday (582209)

      There shouldn't be such a thing as government provided limited liability to corporations.

      Without limited liability, only people who were already incredibly rich could hold power in companies, because only they could pay for the consequences of bad decisions impacting thousands of people from their own pockets.

      The only rational solution is that decision-makers are not fully personally liable for their decisions - but then, that has to go for the good decisions as well as the bad! in other words, just be

      • by roman_mir (125474)

        Without limited liability, only people who were already incredibly rich could hold power in companies

        - not true. Government takes the risk out of investment, but it does so by socializing the cost of that investment. A company can still operate by buying appropriate level of insurance, so BP for example, would have to buy enough insurance to cover for some levels of damage, but it also would have much stricter safety controls in place, to prevent levels of liability that would exceed the bought coverage (and nobody wants to ask their insurance to make payments, don't forget, your premiums go up if you act

        • by timeOday (582209)

          Government takes the risk out of investment, but it does so by socializing the cost of that investment. A company can still operate by buying appropriate level of insurance..

          Normally it isn't government that bears the cost of limited liability (bankruptcy), but shareholders and creditors. The cost of credit reflects the risk of default, which amounts to the same thing as the insurance policy you suggested. But again, since those other parties are bearing the risk, they should not extend such large rewa

    • I shouldn't feed the trolls but...

      But the reality is that in the market that is promoted with all this inflation and destruction of investment and savings, there are no investors...

      Really? There were approximately 2 billion shares traded on the New York Stock exchange today. No investors? Really?

      There should not be any government protections to people, who are investors except that contract law needs to be upheld by courts

      100% of the point of corporations is to protect investors from liability due to the actions of the corporation in order to encourage them to utilize their capital in productive ways. That is THE fundamental feature of a corporation. Without such liability protection the only organizations that can realistically raise substantial amounts of capital are sov

      • by roman_mir (125474)

        I shouldn't feed the trolls but...

        - you believe my comment is a troll, what should I think about yours?

        Really? There were approximately 2 billion shares traded on the New York Stock exchange today. No investors? Really?

        - really. You have just described the very nature of current "investment" strategy, which is arbitrage, making the difference between buying and selling, and HFT is just a way to take that concept to its natural maximum efficiency. There is no investment there because the companies' stocks are not bought as a business, not to get dividends, not to participate in their operations.

        100% of the point of corporations is to protect investors from liability due to the actions of the corporation in order to encourage them to utilize their capital in productive ways. That is THE fundamental feature of a corporation.

        - and this should not be done by government protection.

        If

  • Absolute nonsense (Score:4, Insightful)

    by Tridus (79566) on Friday September 16, 2011 @03:03PM (#37423228) Homepage

    The company is changing strategy. This happens. Companies don't survive when they can't do this. They also don't survive when they have to broadcast to their competition in advance that they MIGHT do something before a decision has been made.

    This is nothing short of lunacy. It shows not only how insanely lawsuit happy the US is, but also how paralyzing a public corporate structure has become. It's much better to be a private company these days. You've got far less onerous reporting requirements, far less overbearing regulation, and the freedom to actually do things as a company without facing constant lawsuits.

    • by LWATCDR (28044)

      Did they do anything illegal? I agree with you that they did not. Did they do anything stupid? Wow are they ever. They bought Palm and then shipped the produces that Palm was working on at the time of the purchase late. Really? They are the biggest PC maker and they say that they may or may not be selling that part off or they may or may not spin it off.
      If anything they are telling people too much too soon because they haven't really decided on anything yet.
      The problem I see is that these big companies go o

      • by tgd (2822)

        Civil cases aren't about illegal -- they're about stupid (paraphrased, but it gets the point across).

    • by tgd (2822)

      A public company exists for one reason -- to protect and increase the value of the company for its shareholders.

      If HP's moves, for whatever reason, aren't in the best interest of the shareholders, then a lawsuit like this is perfectly valid.

      • A public company exists for one reason -- to protect and increase the value of the company for its shareholders.

        That is utterly wrong.

        A public company exists for whatever reason it chooses to exist for. Shareholders can decide if the reason chosen is one the think will make the company grow or shrink, and invest accordingly. In some cases an investor may well put money into a company knowing it will not make a return, because they believe in what the company is doing and simply wish to continue funding t

        • by tgd (2822)

          Never taken even a single business class, have you?

          • Never taken even a single business class, have you?

            Actually yes, and I own my own business - plus I also invest.

            What have you ever done? Very little I imagine, with your utterly insipid response. What a waste of a human mind.

    • Yes. Companies have to change strategies. Look at RIMM. Even though they are a Canadian company, they are still vulnerable to those liability by listing their stock in the US.

  • Insider trading regulations are designed so that shareholders are treated fairly (relative to each other) as far as access to information is concerned. As long as the decision to exit the hardware market was kept confidential, no problem. If insiders (or people with access to insiders) traded HP stock with advance knowledge of the plan, that's a different story.

    With enough degrees of deniability, it's possible that someone traded HP stock based on 3rd or 4th hand information, at which point they acted on

  • i read about lawsuits like this all the time, rarely do i read how they win a lot of money. there is no law that says a company has to reveal every single strategic idea they research

    • by Toonol (1057698)
      I could see it having a chance based on how HP previously reported on their PC business. If every quarterly projection was "pc's are selling fine, we project a healthy profit", then suddenly "we need to bail out of the PC business to save the company", there might be an argument that the company wasn't fully forthcoming,

      Things like this, though, I'm happy enough letting the investigators investigate. This is difficult stuff to armchair quarterback.
  • A company listed on a stock exchange is duty-bound not to be misleading to shareholders, existing or potential. That includes both what is announced and what is omitted.

    This is covered both by the management's fiduciary duties and specified rules (which really merely seek to clarify to an extent the over-riding fiduciary duties). So yes, if they knew with confidence a product was going to tank, they are obliged to report it. There are "class test" ratios which specifically trigger some announcements althoug

  • Had they made the announcement earlier, the same thing would have happened to whoever owned the stock then (mostly the same people). Stock prices take the future into account. Even if they had said "there's a possibility that we'll stop making PCs," it would have gone down nearly as much, and then the rest of the difference as soon as it was official.

    That being said, if the decision makers were selling all of their stock while knowing this (and the public not knowing it), then that's a different story. I di

  • Undoing the damage that Fiorina did is expensive. Why anyone would buy HP right now is beyond me. Once they cut all the crap and pare back down to what they do best (HP UX, printers, pcs, servers, networking, and related software) yea invest. Anything HP is doing beyond this is fat that needs to be trimmed to get the company back in shape.

    Long term, they are doing their shareholders a favor. If you are day trading and just lost a bunch of cash, well, that's part of the game.
  • Wait a second - people are faulting HP from diagnosing a problem and then (god forbid) taking time to put together a business plan and roll out the anouncement of said business plan?!? God forfend! No, instead they should continue on their pre-annointed course, never deviating, regardless of market conditions. (Iceberg dead-ahead? Pshaw. That's not what we decided three weeks ago!) Any major company-shaping (or company-shaking) decision + short-term loss in stock value = Law suit. My reasonably large
  • I don't care. I got a Touchpad for $99!

    whee ;-)

  • Soulskill and jfruhlinger learn from the best [thedailyshow.com].

  • by nurb432 (527695) on Friday September 16, 2011 @04:55PM (#37424300) Homepage Journal

    Is actually what is being discussed here. Executive should be able to act in the best interest of the company without having to reveal items that could negatively effect said plans.

    Being forced to reveal everything you have *planned* to what is effectually the competition would pretty much destroy businesses that compete with each other.

  • If one has to announce something that's going to hammer down the stock, it stands to reason that one time must be the first announcement. Following just behind that like the second law of motion are the lawsuits due to same. HP probably took the usual precautions and made the usual decisions in how to announce it. Best done off hours and suddenly, rather than hinting at it.
  • Not HP vs. Shareholder, but people who shorted some stock sueing the company because it's value went up.

    That would be hilarious.

  • This sort of thing happens every time some company makes decisions or changes direction in a way that negatively effects stock price. I doubt the case will have any legal repercussions unless some judges get adventurous. Then it'll be news.

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