PALO ALTO, Calif. (CNN/Money) -
Wall Street gave about six billion examples Monday why it still doesn't trust Carly Fiorina as CEO -- and now sole pooh-bah -- of Hewlett-Packard.
The examples are each dollar of market-capitalization H-P (HPQ: down $1.84 to $14.84, Research, Estimates) lost Monday following the announcement that Michael Capellas is stepping down as president and operations chief to go run WorldCom.
Here's the rationale behind the selling. Analysts and portfolio managers got really chummy with Capellas during his stint as the head of Compaq Computer before its was bought by HP in May.
Because of his background as a consultant and a chief information officer, Capellas inspired confidence on Wall Street. He was known as straight-shooting and accessible. He was dubbed an operations kind of guy, an executive who knew how to makes things work.
The rap on Fiorina, as I reported extensively in a just-published feature article on her in Fortune, is that she was just a saleswoman.
The conventional wisdom was that as long as Capellas handled operations -- he was named president after HP bought Compaq in May for about $19 billion -- HP would have a fighting chance as a merged company. Hence the 10 percent-plus haircut on the day HP announces Capellas is leaving.
But what's really changed?
The funny thing to me is how little HP is concerned about losing Capellas, especially given how worked up Wall Street is. HP is saying publicly today that Capellas' departure was "expected," and I can say from my experience in spending far too much time with senior management this fall that that seems to be true.
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The comment I heard from two board members, when asked about Capellas' future, was that "Michael needs to figure out what he wants to be." The oft-repeated line around HP is that once someone gets used to being a CEO it's tough to not be one anymore.
When I had lunch with Capellas in late September, he was upbeat but noncommittal. He focused on superficial issues, like being appreciative that Fiorina made room for him on HP's recent financial conference call. At least two of his former direct reports had recently purchased homes in Northern California; Capellas, who spends much of his work-week in an airplane, is renting.
So all this raises a question: Is Fiorina up to the task of running this company without Capellas? I see no reason why not. Anyone who thinks the 48-year-old Fiorina is flitting around focusing on image issues is kidding themselves.
As far as I could tell, Fiorina is actively engaged at the most mundane level, honchoing integration details, as well as at the most important external level, managing relationships with key HP customers and partners.
Will the HP merger work? Too soon to say. But if you liked the combined company with Capellas at $17, it seems more than a little silly to dislike it without him at $15.
Adam Lashinsky is a senior writer for Fortune magazine. Send e-mail to Adam at lashinskysbottomline@yahoo.com.
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