The stock price of HP Inc (HPQ) have risen by over 1.7% since the last till the late morning trading session. Overall, the stock has gone up by over 2.5% today. This rise came after the stock fell by over 5% a few days back. The fluctuation is the result of HP’s billion dollar deal in which it has acquired Samsung’s printing business.
The initial market response to this deal was not very good, which led to the drop in HP’s stock prices. HP’s purchase will include taking on about 6,000 employees. If approved, the deal is expected to close in about 12 months. HP says the deal will bolster its existing partnership with Canon by expanding its laser printing portfolio and paves the way for future printing innovation.
HP is an American technology company, created on November 1, 2015 as one of two successors of Hewlett-Packard, along with Hewlett Packard Enterprise. It develops and provides hardware, such as personal computers and printers. It is the legal successor of the old Hewlett-Packard. It recorded US$57.3 billion in revenue in 2014, compared with Hewlett Packard Enterprise’s US$53 billion. 50,000 employees will work at HP Inc., and Dion Weisler has been announced as CEO of the new company created as a result of the Hewlett-Packard Co. separation.
HP says that it wants to use the purchase to “disrupt and reinvent” the $55 billion copier industry, which “hasn’t innovated in decades.” They added, “Copiers are outdated, complicated machines with dozens of replaceable parts requiring inefficient service and maintenance agreements.”
Samsung says it will “source printers from HP and continue to market them in Korea under the Samsung brand.” For its part, HP has a long term deal with Canon to sell its printers and copiers. The US company recently launched “Multi Jet Fusion” 3D printing tech, and plans to release 3D printers this year starting at what is a apparently a relatively low $120,000. In 2013, Samsung said that it would concentrate on selling its printers and printing services to businesses, which the company believed was a better strategy than targeting consumers. Samsung does not disclose how much revenue its printing business generates.
“When we became a separate company just 10 months ago, it enabled us to become nimble and focus on accelerating growth and reinventing industries,” said Dion Weisler, chief executive of HP Inc. He added that the customers were frequently frustrated with broken copiers and the deal would help HP invest in better technology.
Our analysts have given a “HOLD” rating to this stock. Despite the fluctuation, today’s rise indicated a better response from the market after the deal. The big drop is getting recovered and is expected to slowly rise. Our analysts have also said that buying this share at this stage could prove very risky and hence advice against it. In this mixed market, selling these shares may not be the smartest choice but would certainly not be a bad one.