Updated 8/25/2011 – Last week HP announced an abrupt and uncertain end to their PC division while scrapping their WebOS “TouchPad” tablet product.  Abrupt wouldn’t be so bad if it weren’t for the uncertainty associated with the announcement.  In both the retail and IT business, uncertainty is toxic.  Contributing to HP’s troubles is the perception of disarray at the company.

• HP’s web and server infrastructure couldn’t handle the firesale of TouchPads.  That calls into question HP’s e-commerce competency.
• HP left a ton of money on the table by liquidating the TouchPad inventory at $99 when the devices sold for $315 on eBay.
• HP continued to run (and pay) for celebrity endorsement ads over the last weekend about the HP TouchPad as if to rub salt in the wound.
• HP launched new PC products the day after it (sort of) announced the end of its PC business.

Then investors’ disappointment over the acquisition of  Autonomy for an inflated $10.3 billion was added into the mix.  HP’s stock was battered last Friday by an astounding 20% (though it has gained 4% back this week).  Former CEO Carly Fiorina had some good things to say about the major strategic changes at HP and that HP had to make some decisions about where it will invest its future.

All that said, there was some good news for HP TouchPad early adopters: HP will refund all of their money or the $400+ price difference of the liquidation.   This will help the company avert what would have been a major reputational hit.