HP Considering Giving CEO Apotheker the Axe, Replacement Candidates Lining Up

Hewlett-Packard (News - Alert) shares jumped on Wednesday after news broke that the once-dominant PC maker is considering ousting its oft-maligned CEO, Leo Apotheker, and replacing him with former eBay (News - Alert) chief executive Meg Whitman.

In addition, Bloomberg has reported that HP's board is reconsidering Apotheker's highly aggressive decision to spin off its personal computer business, a unit responsible for much of the company's past triumphs that has struggled recently with the influx of tablets and other Web-enabled consumer devices.

Apotheker, who took over the post last year after former CEO Mark Hurd resigned amid sexual harassment allegations, has been under siege basically from the start due to a series of perceived blunders.

Since announcing plans to shutter its webOS hardware business, HP has seen its stock plummet more than 20 percent. Investors also reacted negatively to Apotheker's decision to acquire British software company Autonomy (News - Alert) Corp. for an astounding $10 billion, a price that many analysts felt was too high.

Under Apotheker's reign, HP has lowered its sales forecast on three occasions and has seen its shares plunge 47 percent. HP made the now-regrettable decision to take on Apple's iPad, only to see its own TouchPad tablet completely flop during the seven weeks that it was on the market.

Best Buy sold only 10 percent of the 25,000 TouchPads in its initial inventory, forcing HP to drop the tablet's price to $99 in an effort to move on from the business for good.

Apotheker has also had trouble keeping news in house. In April, HP's embattled CEO sent out a note to fellow execs warning of a tough third quarter. The news found its way to the press, and forced Apotheker to move up its earnings call in an attempt to talk investors off the ledge.

“There's certainly a lot of investor discontent,” Amit Daryanani, an analyst at RBC Capital Markets, told Bloomberg (News - Alert). “There's widespread frustration with the fact that numbers have been cut three times since he's been there.”

The possible appointment of Whitman, who joined HP's board in January after a failed attempt in politics, is receiving mixed reviews from analysts. Whitman was responsible eBay's historic breakthrough as a thriving tech company, but was also blamed for its sluggish last few years. eBay is still trying to recover from Whitman's decision to purchase Skype for $3.1 billion back in 2005.

Still, investors seem to love the idea. HP shares jumped 7 percent on Wednesday after the news broke that the board is considering the swap.

The move is still not a done deal, however. Jayson Noland, an analyst at Robert W. Baird & Co., told the news source that HP's PC unit head, Todd Bradley, and David Donatelli, head of the business in charge of servers, storage and networking, could also be considered CEO replacements. Cisco (News - Alert) COO Gary Moore and IBM software head Steve Mills may also be strong fits.

Stick with TMC for updates on the story. HP's board is said to be meeting this week to discuss Apotheker's future and that of its PC business.

Beecher Tuttle is a TMCnet contributor. He has extensive experience writing and editing for print publications and online news websites. He has specialized in a variety of industries, including health care technology, politics and education. To read more of his articles, please visit his columnist page.

Edited by Jennifer Russell