HP Stock Buyback

Two of the major computer giants: Dell and HP, are currently fighting to acquire 3 PAR Inc., who specializes in data storage. Their competition has led to an intense bidding war, and the most recent bid, placed by HP, exceeds $2 Billion.

HP’s stock buyback expansion is not directly related to their current bid war over the 3 PAR company. However, they are expanding stock buybacks as a way to increase the confidence of their investors.

A boost in investor confidence is sorely needed by HP after their CEO Mark Hurd resigned in early August due to a scandal in his personal life. HP is hoping that this stock buyback increase can provide that spike in confidence.

Additionally, HP’s future earnings are looking up as well. Their projected earnings for 2011 are $5.05 a share, while the numbers for 2012 are up to $5.57 a share. This is a slight increase over the past predictions.

The buyback program is intended to prevent the market from being flooded with excess amount of HP stocks. If there are too many HP stocks available, demand for the stock falls, and thus so would the value.

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The death of yet another Foxconn Technology employee while on-the-job has inspired yet another raise in salary for its Chinese laborers.

This is the second time in the past week the Chinese electronics manufacturer has responded to public scrutiny over its paltry wages paid out to its workers (many earning a meager $150 per month working 60-70 hours a week).

Foxconn is currently experiencing significant labor shortages and a disturbing trend of worker suicides in the factories. Still, the company employs approximately 800,000 workers, and remains a key manufacturer for Apple, Dell, Sony, and HP.

Company executives say that with the week’s two wage increases, worker salaries will potential reach $300 per month, which some still argue is not enough. On a positive note, that’s twice as much as most Foxconn employees were being paid just one week ago.

A consequence of increasing wage rates in China that American pocketbooks may begin to take the brunt of is that if it starts to cost more to make a product, the consumer will have to pay more for it. The question is: are Americans willing to pay more for their technology for the benefit of people overseas, whom they’ll probably never come in contact with?

The first pay raise hiked up wage rates for Foxconn factory workers to $176 per month. This new raise will only affect workers after a three-month probationary period after an employee’s hiring.