{"id":1619,"date":"2010-08-23T12:14:52","date_gmt":"2010-08-23T16:14:52","guid":{"rendered":"http:\/\/www.credittrends.com\/blog\/?p=1619"},"modified":"2010-08-25T16:27:22","modified_gmt":"2010-08-25T20:27:22","slug":"hpq-3par-deal","status":"publish","type":"post","link":"https:\/\/www.credittrends.com\/blog\/2010\/08\/23\/hpq-3par-deal\/","title":{"rendered":"HPQ, 3PAR DEAL"},"content":{"rendered":"<p>A quick reading of 3PAR&#8217;s (<a href=\"http:\/\/seekingalpha.com\/symbol\/par?source=search_general&amp;s=par\">PAR<\/a>) financial statements reveals the $1.6+ billion deal is not value-adding for HPQ shareholders.<\/p>\n<p><a href=\"http:\/\/www.credittrends.com\/blog\/2010\/08\/23\/hpq-3par-deal\/2\/\"><span style=\"color: #ff0000;\">READ FULL ARTICLE<\/span><\/a><\/p>\n<p><!--nextpage-->3PAR is barely free cash flow positive, and is far from yielding the cash-based return on invested capital (ROIC) I would seek for this large cash expenditure.<\/p>\n<p>Additionally, the $1.6 billion+ in cash withdrawal and other liabilities will impact HPQ&#8217;s (<a href=\"http:\/\/seekingalpha.com\/symbol\/hpq?source=refreshed\">HPQ<\/a>) new cost of equity.<\/p>\n<p>3PAR has paid de-minimus cash taxes during the past three years.<\/p>\n<p>It is very unlikely a 3PAR acquisition would generate $ 40+ billion in annual free cash flow necessary to have the deal work, from a ROIC standpoint. I would believe that is the likely reason managment did not answer the question of the hurdle rate on the deal during this morning&#8217;s conference call.<\/p>\n<p>Related articles:<\/p>\n<ul>\n<li><a href=\"http:\/\/www.credittrends.com\/blog\/2010\/08\/17\/selling-in-hpq-overdone-stocks-6-undervalued\/\">Selling in HPQ Overdone; Stocks 6% Undervalued<\/a><\/li>\n<li><a href=\"http:\/\/www.credittrends.com\/blog\/2010\/06\/08\/use-roic-not-ebitda-for-superior-performance\/\">Use ROIC, Not EBITDA for Superior Performance<\/a><\/li>\n<li><a href=\"http:\/\/www.credittrends.com\/blog\/2010\/06\/04\/investors-overlook-cost-of-capital-to-their-detriment\/\">Investors Overlook Cost of Capital To Their Detriment<\/a><\/li>\n<li><a href=\"http:\/\/www.credittrends.com\/blog\/2010\/06\/04\/real-free-cash-flow-not-as-strong-as-reported\/\">Real Free Cash Flow Not As Strong As Reported<\/a><\/li>\n<li><a href=\"http:\/\/www.credittrends.com\/blog\/2010\/06\/01\/could-stocks-be-over-valued\/\">Could Stocks Be Over-Valued?<\/a><\/li>\n<\/ul>\n<p>Disclosure: No positions<\/p>\n<p><a href=\"http:\/\/www.credittrends.com\/blog\/about\/\">Kenneth S. Hackel<\/a>, CFA<br \/>\nPresident<br \/>\n<a href=\"http:\/\/www.credittrends.com\/blog\/ct-capital-llc\/\">CT Capital LLC<\/a><\/p>\n<p><a href=\"http:\/\/feedburner.google.com\/fb\/a\/mailverify?uri=CreditTrends&amp;loc=en_US\">Subscribe to CreditTrends.com by Email<\/a><\/p>\n<p><a href=\"http:\/\/www.amazon.com\/gp\/product\/0071744355?ie=UTF8&amp;tag=credtren-20&amp;linkCode=shr&amp;camp=213733&amp;adid=0VR08J2ZHP6QA42KSCDA&amp;creative=393185&amp;creativeASIN=0071744355\"><img loading=\"lazy\" decoding=\"async\" title=\"Security Valuation and Risk Analysis: Assessing Value in Investment Decision-Making\" data-src=\"http:\/\/www.credittrends.com\/blog\/wp-content\/uploads\/2010\/07\/Kens-Book4.jpg\" alt=\"\" width=\"96\" height=\"136\" src=\"data:image\/gif;base64,R0lGODlhAQABAAAAACH5BAEKAAEALAAAAAABAAEAAAICTAEAOw==\" class=\"lazyload\" style=\"--smush-placeholder-width: 96px; --smush-placeholder-aspect-ratio: 96\/136;\" \/><noscript><img loading=\"lazy\" decoding=\"async\" title=\"Security Valuation and Risk Analysis: Assessing Value in Investment Decision-Making\" src=\"http:\/\/www.credittrends.com\/blog\/wp-content\/uploads\/2010\/07\/Kens-Book4.jpg\" alt=\"\" width=\"96\" height=\"136\" \/><\/noscript> <\/a><\/p>\n<p>If you are interested in learning\u00a0more about cash flow, financial structure and valuation, order \u201c<a href=\"http:\/\/www.amazon.com\/gp\/product\/0071744355?ie=UTF8&amp;tag=credtren-20&amp;linkCode=shr&amp;camp=213733&amp;adid=0VR08J2ZHP6QA42KSCDA&amp;creative=393185&amp;creativeASIN=0071744355\">Security Valuation and Risk Analysis<\/a>\u201d out this fall from McGraw-Hill.<\/p>\n<p class=\"facebook\"><a href=\"http:\/\/www.facebook.com\/share.php?u=https:\/\/www.credittrends.com\/blog\/2010\/08\/23\/hpq-3par-deal\/\" target=\"_blank\" title=\"Share on Facebook\">Share on Facebook<\/a><\/p><div class=\"tweetthis\" style=\"text-align:left;\"><p> <a class=\"tt\" href=\"http:\/\/twitter.com\/home\/?status=HPQ%2C+3PAR+DEAL+https%3A%2F%2Fwww.credittrends.com%2Fblog%2F%3Fp%3D1619\" title=\"Post to Twitter\"><img decoding=\"async\" class=\"nothumb lazyload\" data-src=\"http:\/\/www.credittrends.com\/blog\/wp-content\/plugins\/tweet-this\/icons\/en\/twitter\/tt-twitter.png\" alt=\"Post to Twitter\" src=\"data:image\/gif;base64,R0lGODlhAQABAAAAACH5BAEKAAEALAAAAAABAAEAAAICTAEAOw==\" \/><noscript><img decoding=\"async\" class=\"nothumb\" src=\"http:\/\/www.credittrends.com\/blog\/wp-content\/plugins\/tweet-this\/icons\/en\/twitter\/tt-twitter.png\" alt=\"Post to Twitter\" \/><\/noscript><\/a> <a class=\"tt\" href=\"http:\/\/twitter.com\/home\/?status=HPQ%2C+3PAR+DEAL+https%3A%2F%2Fwww.credittrends.com%2Fblog%2F%3Fp%3D1619\" title=\"Post to Twitter\">Tweet This Post<\/a><\/p><\/div><!-- AddThis Advanced Settings generic via filter on the_content --><!-- AddThis Share Buttons generic via filter on the_content -->","protected":false},"excerpt":{"rendered":"<p>A quick reading of 3PAR&#8217;s (PAR) financial statements reveals the $1.6+ billion deal is not value-adding for HPQ shareholders. READ FULL ARTICLE Share on Facebook Tweet This Post<!-- AddThis Advanced Settings generic via filter on get_the_excerpt --><!-- AddThis Share Buttons generic via filter on get_the_excerpt --><\/p>\n<p class=\"facebook\"><a href=\"http:\/\/www.facebook.com\/share.php?u=https:\/\/www.credittrends.com\/blog\/2010\/08\/23\/hpq-3par-deal\/\" target=\"_blank\" title=\"Share on Facebook\">Share on Facebook<\/a><\/p>","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"om_disable_all_campaigns":false,"_monsterinsights_skip_tracking":false,"footnotes":""},"categories":[1],"tags":[34,335],"class_list":["post-1619","post","type-post","status-publish","format-standard","hentry","category-general","tag-hpq","tag-par"],"_links":{"self":[{"href":"https:\/\/www.credittrends.com\/blog\/wp-json\/wp\/v2\/posts\/1619","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.credittrends.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.credittrends.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.credittrends.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.credittrends.com\/blog\/wp-json\/wp\/v2\/comments?post=1619"}],"version-history":[{"count":8,"href":"https:\/\/www.credittrends.com\/blog\/wp-json\/wp\/v2\/posts\/1619\/revisions"}],"predecessor-version":[{"id":1669,"href":"https:\/\/www.credittrends.com\/blog\/wp-json\/wp\/v2\/posts\/1619\/revisions\/1669"}],"wp:attachment":[{"href":"https:\/\/www.credittrends.com\/blog\/wp-json\/wp\/v2\/media?parent=1619"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.credittrends.com\/blog\/wp-json\/wp\/v2\/categories?post=1619"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.credittrends.com\/blog\/wp-json\/wp\/v2\/tags?post=1619"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}