HP Chief Resigns!

The biggest story of the day in the tech world and on Wall Street is the resignation of Carly Fiorina from Hewlett-Packard. She served as both Chairman of the Board and CEO of this large company. Her controversial six years as head of Hewlett-Packard was highlighted by the company's purchase of Compaq Computer Corp. in 2002.

If you read my newsletters back then, you know that the Compaq merger was extremely controversial and was opposed by nearly half of the stockholders at one time, including the son of the company's co-founder William Hewlett. Members of the Packard family also were against the merger. Walter Hewlett immediately resigned from the board.

Fiorina said that the resignation was the result of disagreements on HP's future. HP Chief Financial Officer Robert Wayman will step in as interim CEO, while a search begins for a new CEO.

Board of Director's member Patricia Dunn said that the board reached a decision on Tuesday and asked Fiorina to resign. She agreed. Dunn also said that the board had been discussing options for several weeks.

Fiorina's resignation follows months of criticism from inside the industry and inconsistent results. In the third quarter last year, HP stunned analysts when it announced that its Enterprise Storage and Servers group lost $208 million, due to problems with order fulfillment and a migration of its order management operations.

Over the past year, Fiorina also has consolidated HP's businesses, last year combining its enterprise systems group with its services unit, and earlier this year folding its PC business into the highly profitable Imaging and Printing Group, which generates almost three quarters of HP's revenues.

For the past few years, one of the key issues debated in the industry has been whether HP should spin off a part of its business, in particular, the Imaging and Printing Group, to give HP a better focus. During a meeting with financial analysts in December, Fiorina said the board over the past few years had addressed that issue at least three times, and each time decided against it. Fiorina and other executives said one of HP's strengths was its large portfolio of products, giving customers a single place for most of their IT needs.

Wall Street seemed to approve of the move as the stock closed up nearly 7% in today's trading.