Today: Rumors of Carl Icahn's interest in Hewlett-Packard (HPQ) lifts the company's beleaguered shares higher as tech stocks help Wall Street avoid losses. Also: Facebook's privacy vote and Google's (GOOG) tax issues.
Hewlett-Packard stock gains as rumors of Icahn interest spread
Hewlett-Packard -- the worst performer in the Dow Jones industrial average this year -- gained the most of the 30 components in the index Monday, as rumors that corporate raider Carl Icahn is buying shares in the Palo Alto tech giant excited Wall Street.
Icahn, who has already accumulated a 10 percent stake in Netflix (NFLX) and said publicly he thinks the Los Gatos video-on-demand service is ripe for an acquisition, has not confirmed a second large investment in a Silicon Valley tech giant. CNBC's David Faber reported that HP told him it has not talked with Icahn nor is it aware of any investment in the company by the activist
However, even the flimsy reports of Icahn's interest in the tech titan were a boon to the company's stock, which rose 2.6 percent on the day to close at $14.16. The gain continues a run of positive movement for the company's stock since it hit decade-low prices in the wake of the company's revelation that British software giant Autonomy was worth billions less than HP paid for it just last year, which CEO Meg Whitman said was partially due to illegal accounting tricks by the company's management.
Since closing at its lowest price since 2002, $11.71, on the day of the Autonomy revelation, which was wrapped in with another disappointing quarterly earnings report from the company, HP has gained 20.9 percent. However, the news about the company's prospects has not improved along with the stock price, as HP's printing business faces the same decreasing demand as its core personal-computer business and customers are concerned about the company's management.
However, the negative view of HP's prospects could have driven the price low enough to attract bargain hunters, and some writers have shown that HP could be worth much more than its current market capitalization by breaking up the business -- a recent analysis showed that HP's assets, when broken up, were worth more than $66 billion. Minus its $16.4 billion of debt, the company's assorted parts would be worth of about $50 billion, almost twice its market cap of $27.8 billion at the end of Monday's trading session.
Former HP CEO Léo Apotheker famously investigated breaking apart the company, but Whitman has shut that down since taking over more than a year ago. However, the move would certainly make sense to Icahn, who has pushed for severing and selling companies as an investor, including when he convinced Motorola to spin off its hardware business as Motorola Mobility -- a company Google eventually purchased for more than $12 billion.
HP wasn't the only Silicon Valley tech firm to help out the Dow on Monday -- San Jose networking giant Cisco (CSCO) had the second largest percentage gain on the day, increasing 2.4 percent after CEO John Chambers detailed a future for the company Friday that looked a lot like IBM. The big contributions from HP and Cisco pushed the Dow to a slight gain of 0.1 percent Monday, when all three major U.S. stock indexes moved a big higher, led by the tech-heavy Nasdaq at 0.3 percent.
Google active on multiple fronts as Gmail and other services crash
While Google wrote a big check for Motorola Mobility, it wasn't interested in every aspect of the business, and it is taking bids right now for the company's division that manufactures set-top boxes for cable television.
That part of the company's business doesn't seem to fit Google's plans, despite the company's Google TV efforts, experts said.
"It's a fine business, it's just not core to Google," Pivotal Research Group analyst Brian Wieser told Reuters.
One of Google's primary motives for purchasing Motorola was patents, as the company looked to build its war chest with rights to technologies as Apple (AAPL) made a push to sue hardware manufacturers that use Google's Android operating system, such as Samsung. The two valley tech giants have surprised many onlookers, therefore, by partnering up to bid on patents belonging to photography company Kodak, according to a report from Bloomberg.
While that move would be surprising, the big surprise on Monday for users of Google's services was service interruptions for the Mountain View company's popular webmail product, Gmail, and other offerings.
As if service interruptions, a sale and odd partnerships weren't enough, Google also faced a report that showed it avoided nearly $2 billion in global tax payments by routing foreign profits through a Bermuda tax shelter, which certainly won't make the company any more popular in Europe, where its tax payments are already a big issue.
Google stock advanced 0.2 percent on the day to close at $685.42.
While Facebook users who voted were overwhelmingly against the changes, the total did not come close to the threshold that would have made the vote binding. More than 30 percent of Facebook's more than 1 billion users would have had to vote in the poll, while fewer than 700,000 actually did.
The tough-to-achieve standards for such votes was one of the biggest reasons the Menlo Park social network gave for wanting to do away with them, but the changes will be more wide than just the end of site-governance votes, including opening Facebook's messaging service to outside entities and a universal policy that would allow the company to share user data among other sites it owns, namely Instagram.
Facebook stock gained 1.3 percent Monday to close at $27.84.
Silicon Valley tech stocks
The tech-heavy Nasdaq composite index: Up 8.92, or 0.3 percent, to 2,986.96
The blue chip Dow Jones industrial average: Up 14.75, or 0.11 percent, to 13,169.88
And the widely watched Standard & Poor's 500 index: Up 0.48, or 0.03 percent, to 1,418.55
Check in weekday afternoons for the 60-Second Business Break, a summary of news from Mercury News staff writers, The Associated Press, Bloomberg News and other wire services. Contact Jeremy C. Owens at 408-920-5876; follow him at Twitter.com/mercbizbreak.