10/4/2010 5:30 PM EDT
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Shares in Hewlett-Packard immediately sold off on the news, and they are still down today. The key questions are why, and where are the shares going next?
Let's face it, most of the selloff was due to the market fretting: "It's really not Apple (AAPL -commentary - Trade Now) Tim Cook taking over!" That rumor was swirling early in the week, boosting Hewlett-Packard's shares while knocking down Apple's. The rumor was denied within a couple of hours, and why shouldn't it have been?
Put yourself in Tim Cook's shoes. You're next in line to lead what very well might soon be the biggest company in the world by market cap. Your boss, although seemingly healthy and just as vibrant as he has ever been, has recently suffered from a rare medical condition. Would you leave, just so you can become the CEO of Hewlett-Packard today? No chance.
Yet hope sprang eternal for investors. Even if Hewlett-Packard announced it was hiring Jack Welch to come out of retirement and lead it, the stock would have slumped, because it wasn't Cook.
That being said, there's no question that another big part of the selloff had to do with the fact that no one was expecting Leo Apotheker's name.
The most obvious choice was Executive Vice President Todd Bradley as an internal pick. Bradley has been successful in his role at Hewlett-Packard, turning around PCs, and he seemed to be the right age and tenure to step forward. EVP Ann Livermore had been passed over twice before. EVP David Donatelli was still too new to Hewlett to grab the brass ring.