HP Stock rises instantly by 10% on the rumor of CEO getting fired

HP Stock Rise

Well, this is quite interesting. There is the company well known for innovation, Apple, whose stocks fell down with every news of illness of its former CEO, Steve Jobs. And there is HP, whose stock pops up by more than 7% just because of the rumor that its CEO, Leo Apotheker will be fired by board.

As per the report, HP is planning to offer this position to eBay head Meg Whitman. Whitman, 55, has been an HP director since early this year. Previously she has served as eBay's president and CEO from 1998 to 2000. Soon after this announcement, HP shares spiked by about 10% and at the end of the day, it closes at around a rise of 6.7%.

Apotheker, former CEO of business software firm SAP, was a surprise choice as an external candidate for the CEO post which was ironic to the fact that HP had been widely expected to appoint an internal employee. Todd Bradley, executive vice president of HP's personal systems group, and Ann Livermore, leader of the company's enterprise business, were among the leading contenders for the post.

Moreover, Apotheker came with his own checkered past. He served for a short time as CEO and for many years in other top roles at SAP, which is struggling to hold its market share against onslaughts from Oracle and IBM. After more than two decades at SAP, Apotheker was ousted in 2009.

Talking about the compensation drawn by him from HP, Apotheker landed an annual salary of $1.2 million, plus a $4 million signing bonus and an additional $4.6 million for relocation assistance and to offset payments from SAP that he forfeited by taking the new job. He was also eligible for a cash bonus of $6 million for 2011.

This explains the reason why stock boosted up by 10% instantly right after the news of Apotheker being fired.