HP's Hurd to testify before Congress
House Committee accepts CEO's offer to testify at hearing on leak probe; SEC seeks information from HP.
By Grace Wong, CNNMoney.com staff writer

NEW YORK (CNNMoney.com) -- Hewlett Packard CEO Mark Hurd will testify at a Congressional hearing about the tactics used in the company's controversial leak probe next Thursday.

HP said Thursday Hurd had offered to appear before the House Energy and Commerce Committee. A spokesman for the committee confirmed Friday that Hurd will testify.

Hurd joins a roster that includes several individuals involved in the HP probe - including outgoing chairwoman Patricia Dunn and chief ethics officer Kevin Hunsaker.

Next week's hearing comes amid growing scrutiny of HP's leak probe.

HP said Thursday the Securities and Exchange Commission has requested information from the computer maker about the leak probe.

In an SEC filing, HP revealed the government is seeking data "relating to the resignation of Mr. [Tom] Perkins from HP's Board of Directors" and "investigations conducted by HP or any of its directors into possible sources of leaks of HP confidential information."

The company said it will cooperate fully with the request.

Hurd in the crosshairs

As the spotlight in the scandal moves closer to Hurd, investors question whether the controversy could start affecting the computer maker's financial performance.

The company's stock had barely budged since the scandal erupted early this month, largely because Hurd has managed to distance himself from the investigation, analysts and investors have said.

But now Hurd is moving closer to center stage. A news report published Thursday linked Hurd to the company probe - and the news sent HP (down $0.30 to $34.57, Charts) shares down about 6 percent in heavy New York Stock Exchange trading.

Wall Street is sending a clear message: the more Hurd is at risk, the more vulnerable the company's shares.

Hurd, who took the helm at HP in April 2005, has played a key role in getting the company back on track. Once a laggard on Wall Street, HP's stock performance has eclipsed rivals Dell (Charts) and IBM (Charts) over the past year.

But if he played a bigger role than previously thought in the leak probe, his future role at the company could be jeopardized.

"If he approved or even knew about [the tactics used], he will have to leave," said Nell Minow, co-founder of the Corporate Library, a corporate governance firm.

The scandal doesn't impact HP's fundamentals - the quality of its products and research - but the turmoil in the boardroom is probably already a serious distraction to upper management. And any lack of focus on running the company could prove damaging.

"If Hurd is involved, his credibility and effectiveness could be tempered, and that would be worrisome," said Gene Sit, chief investment officer of the Sit Science & Technology Growth Fund (Charts), which owns shares of HP.

Investors are concerned that Hurd, who has been the architect of HP's turnaround effort, may not be around to continue to drive it, analysts said. If he left, investors would have to face the uncertainty of new management and leadership.

But Louis Miscioscia, an analyst at Cowen and Co., said at this point, it doesn't look like Hurd will have to leave the company. "With him being moved up to chairman, you'd think everyone at HP would have carefully vetted the situation," he said. Miscioscia rates HP an "outperform."

Hurd is holding a news conference Friday to explain HP's view of the investigation, but that may only be the start of his widening exposure to the scandal.

Back in California

The leak probe has already resulted in a major boardroom shakeup and has ignited investigations from California and federal authorities.

California Attorney General Bill Lockyer has pursued the case aggressively, saying crimes were committed and that his office has enough evidence to file charges against HP officials and outside contractors.

Tension between the two sides flared Thursday after Lockyer said HP was stalling the investigation. HP said it has been cooperating and continues to cooperate with the attorney general's office. Lockyer's spokesman said the company resumed cooperation after Lockyer's comments were broadcast.

Miscioscia doesn't own any shares of HP, and his firm doesn't do investment banking for the company.


And now the heat's on Hurd

Hurd may have had leak probe role

When leaking is the right thing to do Top of page

Sponsors
YOUR E-MAIL ALERTS
Follow the news that matters to you. Create your own alert to be notified on topics you're interested in.

Or, visit Popular Alerts for suggestions.
Manage alerts | What is this?

Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer. Morningstar: © 2018 Morningstar, Inc. All Rights Reserved. Factset: FactSet Research Systems Inc. 2018. All rights reserved. Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor's Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2018 and/or its affiliates.

Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer. Morningstar: © 2018 Morningstar, Inc. All Rights Reserved. Factset: FactSet Research Systems Inc. 2018. All rights reserved. Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor's Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2018 and/or its affiliates.