CEO Merry-Go-Round at Hewlett-Packard (HP, SAP, EBAY)

Following a decent boost to its long-suffering stock price yesterday, Hewlett-Packard Co. (NYSE: HPQ) has nearly given it all back today. Yes, the whole market’s down by about -3.75%, but HP’s shares are down more than -5.5% in mid-afternoon trading. Yesterday’s rise was attributed reports that CEO Leo Apotheker, less than a year in the job after leaving SAP AG (NYSE: SAP), was going to be shown the door by HP’s board. Today’s drop probably follows the rumors that the former CEO of EBay Inc. (NASDAQ: EBAY), Meg Whitman, will be offered Apotheker’s job after the markets close this afternoon.

HP stock has been moving down steadily, but slowly, since mid-February. Then HP announced that it was acquiring UK enterprise software firm Autonomy Corp. for around $10 billion and was going to sell of its PC business. That cost shareholders about 30% on top of a 20% drop from the 52-week high.

HP’s current troubles are entirely of Apotheker’s making. He didn’t offer up $10 billion for Autonomy without his board’s approval, just as he didn’t decide to jettison the PC business without approval. If the board thought those were lousy ideas when first offered, that’s when it should have said ‘No’.

This is a board of directors that couldn’t say no to Carly Fiorina when she acquired Compaq over the objections of Walter Hewlett, son of one of the company’s founders. Then one could say that the board over-reacted to the bad press that surrounded discrimination charges against former CEO Mark Hurd. Now, apparently, it’s Apotheker’s turn to be the victim.

Not that he hasn’t brought some of this on himself. His long experience at software giant SAP might not have been the best fit for an iconic hardware company like HP. This could be one of those times that the old saying is true: When all you have is a hammer, everything looks like a nail.

An even larger question might be who in her right mind would want to be CEO of HP? Whitman might, after failing to win the governorship of California. She spent a lot of her EBay fortune on that. And Whitman, like Hurd, is generally seen as a cost-conscious manager who is not afraid to fire lots of people. That worked for Hurd, whom HP shareholders loved for it, and the HP board needs a little love from stockholders right now.

Even if Whitman, or anyone else, agrees to take over, what can a new CEO achieve? Kill the Autonomy deal, stay in the PC business, move into something else, anything else?

HP may not be salvageable. And its board doesn’t have to look far and wide to round up the usual suspects.

Paul Ausick