Monday, September 28, 2009

Xerox Shoots Itself

Xerox (XRX) announced its takeover of ACS and its entry into the services sector. Everyone seems to be doing it. IBM a long time ago. Dell just snapped up Ross Perot’s old company EPS. All these deals are basically about what’s in it for the acquiring company. The company being snapped up will help solve some fundamental problems in the new mother ship. Xerox dropped some 20% on the news.

The deals are signs of desperation and admission that the core business model was no longer working and seems to be fundamentally flawed. The acquisition will not necessarily solve the problem. But it just may delay the inevitable.

If you call your lawyer when wealth is destroyed just follow the track of press releases and public messages. Xerox did not give any indication that they were unhappy with the core business and wanted to re-invest themselves.