Hewlett-Packard Co. (NYSE: HPQ) is in trouble. While the turnaround is still not yet in the seventh inning, Meg Whitman’s work is difficult and will only be that much more challenging ahead. The problem is that HP shares just hit an eight-year low. Dell Inc. (NASDAQ: DELL) is also in the dog house at multiyear lows.

It was back on July 18 that short-seller Jim Chanos disclosed that he was actively short selling HP as one of his best current ideas. Shares were roughly at $19.50 at that time, but today’s drop of 2.75% has shares down at $16.26. The prior 52-week range was $16.70 to $30.00.

John Chambers, CEO and Chairman of Cisco Systems Inc. (NASDAQ: CSCO), said yesterday when he was outlining his potential retirement time frame that Meg Whitman likely would have a very difficult time turning HP around. HP has strong competition on all fronts, and now the move to software and services might not be enough to fend off the bleeding.

Europe may be a driving force of pressure, as may be the slowing Asian story, but the drop alone here is hard to ignore. The only good news is that HP’s dividend yield is now approaching 3.1% due to its price drop. It is also hard to imagine that the market cap is a mere $32 billion now and it is even harder to imagine that HP trades at a mere four-times expected earnings.

The age of Apple Inc. (NASDAQ: AAPL) is acting to hurt the dominance of HP.

This is pain for shareholders who were used to gains and gains under CEO Mark Hurd. Serious pain.

At least HP can claim that it is not alone. Dell Inc. (NASDAQ: DELL) has now broken under the $10.00 mark, and the price of $9.80 after a 1.9% drop also gives it a dividend yield of about 3.1%. The last time that Dell shares were less than $10.00 was at the height of the panic selling in early 2009.

JON C. OGG

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