By: Todd M. Schoenberger
Let’s cool the gossip, please. Seriously—no more innuendos or rumors! The Mark Hurd/Jodie Fisher relationship/liaison/afternoon delight…whatever you want to call it…needs to be put to rest because the drama is impacting more than the wealth of Hewlett-Packard shareholders. It’s just another ancillary event that makes picking stocks that much more difficult.
I could care less about the juicy details surfacing from the sexual harassment claims. Unfortunately, though, because both parties involved can’t shut up, this story is making its way on every single mainstream media network.
The question any lawyer not associated with this case would ask is: where’s the NDA? This is the non-disclosure agreement that you would’ve thought was signed by those involved to keep the gossip bugs away. Now, we have the hottest sex scandal to hit America since Tiger Woods’ exposed extracurricular activities.
The immediate impact is a sell-off of Hewlett-Packard’s stock. HPQ immediately sold-off in afterhours trading following the news of Hurd’s resignation on Friday. Now that the scintillating features are making their way into the press, the stock remains under further pressure.
Oh, you don’t own HPQ, eh? Think again. Of the 2.3 billion shares outstanding, nearly 80% are owned by institutions. In other words, those mutual funds you are holding in your 401k—you know, that trusted vehicle for your retirement—most likely are holding a position in Hewlett-Packard. Now, do I have your attention?
The other side of this is we already have a reputation problem on Wall Street, but now we have to deal with reputational risk of corporate CEOs who run into ethical problems. This just adds one more degree of uncertainty for retail investors and adds further evidence and justification to stay out of stocks.
Can we expect a sex-police version of Sarbanes-Oxley? Probably not, unless some desperate Democrat who’s about to lose on November 2nd is looking for a quick print in the media, which would be hilarious.
The bottom line is, though, that both parties should’ve signed NDAs, thus forcing them to keep quiet. The story would’ve died down leading into today’s action, especially with that major development taking place in the Gulf that should be the key story of the day.
Do you remember the most market influential event of the summer? Yeah, something about oil and dead fish? Now, it can’t even make it in Section A because of the HPQ drama. I know I’ll be taking a pass on the premier of Hewlett-Packard Shore!
NOTE:
Todd M. Schoenberger will be appearing on the Fox Business Network’s Bulls & Bears today, August 9th, from 4-5:00pm, ET, discussing this topic and tomorrow’s key vote on a $26 billion bill in the House of Representatives. I hope you have a chance to tune-in.
