Hewlett-Packard Company (NYSE:HPQ) Discussing Aruba Networks Purchase To Expand Networking Capabilities

Hewlett-Packard Company (NYSE:HPQ) announced it is in discussions to purchase Aruba Networks. The company produces wireless-network infrastructure that is utilized by hotels, universities and shopping malls. Aruba is currently valued at $2.4 billion and the deal could be completed and announced as soon as next week. This is still subject to both sides accepting and the talks could fall through should the two sides not find common ground.

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Big Move

For Hewlett-Packard Company (NYSE:HPQ), this would be the company’s largest acquisition in years and a sign that CEO, Meg Whitman, is finally positioning the company to expand its wireless networking capabilities in an effort to bolster lagging revenue streams. She has spent previous years focusing on cost-cutting measures and the growth side of the business has been suffering for that fact. HP is planning to split into two companies later in 2015. Whitman is planning to be in charge of the side that focuses on corporate customers.

Good Sign

The move is a positive sign for shareholders that have continued to support the company through the cost reduction period. It shows Hewlett-Packard Company (NYSE:HPQ) has effectively utilized that plan is a positioned to move forward of growing the business and creating new revenue. When Whitman took over the company was barely able to operate much less make acquisitions and this is a positive testament to her effectiveness. Aruba makes hardware and software that is used in the building of Wi-Fi networks. Its customer base includes Chinas Dalian Wanda Group. Dalian also uses the technology for shopping malls in China. It also services UCLA and the Edzan Hotels & Suites in Qatar. Sales for Aruba are expected to eclipse $1 billion by the fiscal 2017 period. HP’s entire networking division only created $562 million in sales for the first quarter in comparison.


The stock is trading in a channel between $65 and $70 and there is solid resistance at $70. If it can break above that there is a gap it should back fill and move to $80 without much headwinds.

Culver Stinson

Culver Stinson

Stinson is US Markets Daily’s Senior Producer for News & Public Affairs.