Confused about developments at Hewlett-Packard? Follow the stock price.
News that California Attorney General Bill Lockyer plans to indict former HP Chairman Patricia Dunn and at least four others involved with the company's boardroom spying scandal sounds like a rout for the former darling of Silicon Valley. But in reality it's a big step forward for HP–one that investors have blessed.
The big question for the tech giant is not what will happen to Dunn or any of her former underlings or hired guns. HP took them out of the picture with a housecleaning that led to Dunn's resignation two weeks ago and the departure of several other officials, including General Counsel Ann Baskins, last week.
The guy who matters now is CEO Mark Hurd. And the California AG has not fingered him. Nor, apparently, has the AG targeted Baskins, who presumably would constitute a direct link to Hurd. Instead, Lockyer is fishing further down the food chain, going after Kevin Hunsaker, who was a senior lawyer at HP, and three outside investigators hired by the company.
Lockyer may still have some surprises. And the U.S. Justice Department and Securities and Exchange Commission are still waiting outside HP's door. But if Lockyer's move frames the rest of the saga, and the perp list is limited to the Dunn cabal he has already identified, then HP is on its way toward putting this embarrassment behind it.
For starters, it would indicate that the company's in-house efforts to get to the bottom of the scandal have accurately identified those allegedly responsible, while sparing those who are not. HP was obviously blindsided by its own foolish activities, but it's far better to rediscover your ethics and out the suspected perpetrators yourself than to dissemble repeatedly and be led by the nose to the woodshed.
And if all the people with dirty fingers are out of the company, that will make it easier for HP to focus on sales and strategy and do the things a company is supposed to do, with less internal dickering and butt-covering.
As long as the ax falls behind Hurd, investors will express relief, which they did today: HP's stock drifted upward all day and closed at about $38, up more than 1.5 percent. Not a bad day at all.