HP stock is technically worthless and is in fact really worth negative $2, an analyst has said.
According to Sterne Agee analyst Shaw Wu, the intrinsic value of HP is at a negative because of a pending $36 billion write-off.
“Their balance sheet is a mess. We calculated—I couldn’t believe this—the tangible book value -$2. The book value, when you look at it, says $16. But you have to take out the $36 billion in goodwill. They are going to write that off, the whole thing at some point,” Wu told Business Insider on Friday.
“So basically, the company’s intrinsic value is negative. They are fortunate the stock’s not zero. This is not an opinion. These are facts,” he added.
Furthermore, the analyst says that they have given HP “the benefit of the doubt”.
However, he added that the company is “blaming everything on the economy. But the problems they have are not economy-related. If that’s the case, why are Apple and IBM doing well? To us that makes no sense. So we think the problems are structural.”
The scathing assertions by the analyst comes after HP reported a massive $8.9 billion loss in August, the biggest the company has ever had.
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