HP resolving valuation problem, not its future

New York

HEWLETT-PACKARD's plan to split in two leaves it just 10 per cent undervalued and looking for a future. Over the past three years, chief executive Meg Whitman has boosted the tech conglomerate and its stock by refraining from acquisitions, paying off debt and firing employees. Spinning off its PC and printer business should close the firm's stubborn conglomerate discount. But the harder part - avoiding obsolescence - still awaits resolution.

Though the company's PC and printing businesses are cash cows, their future is bleak. PC sales have stabilised after years of decline, but tablets may renew their assault on the market, and computer prices will continue to fall.