HEXUS.sharewatch: carnage for HP

Last week tech giant HP announced it was looking at a wholesale retreat from the consumer computing market - revealing its acquisition of Palm to be a complete bust and opening the door to the sale of its market-leading PC division.

These bomb-shells were delivered alongside - and presumably meant to justify - the announcement that HP plans to spend over $10 billion to acquire UK enterprise software company Autonomy, as part of a wholesale reinvention of HP as a business software and services operation.

There are many reasons to applaud the thinking behind such a move - the business market offers far higher margins than the consumer one (unless you're Apple) - but investors seems to be appalled with both the way it was delivered, and the apparent vagueness and uncertainty of the plans. Accordingly HP's shares fell by a total of 27 percent last week - wiping-out almost $20 billion of shareholder value.

HP wasn't helped by the general macroeconomic conditions being so shaky. A raft of weak economic data coupled with new drama in the European sovereign debt crisis led all markets down last week. The irony is that investor uncertainty caused by excessive sovereign debt has led them to flee equities and into... sovereign debt. Rocks and hard places spring to mind.

Google was also punished for a proposed Motorola acquisition that left many investors scratching their heads. On the flip-side, as soon as Google made its announcement Nokia's shares opened up around ten percent and held onto most of that in spite of all the general panic.