By Jeff Reeves, Editor, InvestorPlace.com

The market had quite an ugly day on Thursday. But for a brief moment, Hewlett-Packard (HPQ) swam upstream on news that it is working out a massive $10 billion buyout of software company Autonomy. Of course, the gains were fleeting and Hewlett-Packard stock finished the day down, along with nearly every other stock on Wall Street. Some investors were fooled for about an hour, and then the profits evaporated. In premarket trading Friday, it was down 13%.

Thursday's news is a fitting example of how HP is trying to manage its business these days. The 10-figure buyouts. The claims that it is rethinking its role in the tech sector. The blatant flaunting of its massive cash stockpile at a time when companies claim to be suffering from the economic downturn.

Hewlett-Packard is everything that's wrong with corporate America right now, exhibiting stupidity, a lack of innovation, bloated operations and no leadership.

"Palm’s innovative operating system provides an ideal platform to expand HP’s mobility strategy and create a unique HP experience spanning multiple mobile connected devices," said Todd Bradley, executive vice president, Personal Systems Group, HP.

Oh, yeah? Well, what about the news Thursday that Hewlett-Packard will abandon any effort to capitalize on the mobile market by killing its tablet computer and mobile phone business based on WebOS, the very gadgets Palm was supposed to inspire? Only can a wasteful, boneheaded corporation like HP make a $1.2 billion purchase during a recession and then give up on that buy a mere 16 months later. (That sounds almost like something Congress would do, doesn't it?)

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The icing on the cake: Just this past February after the Palm deal closed, HP made a big to-do about its plan to duke it out with the iPad – and just months after smack-talking, had to eat its words.

In November 2009, the tech giant paid $2.7 billion for routing and digital security stock 3com. Then in September 2010, Hewlett-Packard engaged in a spitting match with Dell (DELL) to buy out data storage and cloud computing stock 3Par – with HP paying $2.35 billion for its "winning" bid of $33 a share, over 83% higher than Dell’s opening bid of $18 a share.

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Now we have news that the company could be buying British software stock Autonomy for $10 billion, according to reports confirmed by major news sources Thursday.

We’ve already had HP essentially admit the Palm move was a disaster. But even if we take a huge leap of faith and assume those other moves pay off, HP is building its future profits on the work of other companies and the efficiencies it can gain from streamlining operations to maximize margins and profits.

That’s fine if you’re a CEO or executive at the top of the food chain. Not so good if you’re part of the 25,000 workers trimmed in the wake of the 2008 acquisition of Electronic Data Systems for $13.6 billion. Or the 9,000 HP employees let go in 2010, or the thousands of folks who will undoubtedly be terminated as this tech giant "consolidates" operations in the years ahead due to these bloated buyout deals.

Far be it from Hewlett-Packard to grow through innovation and critical thinking -- or at the very least, adapt to the changing landscape and find a way to connect with more consumers and businesses with current offerings. That would require some leadership and some true entrepreneurial spirit.

True, growing via acquisitions isn’t necessarily a bad thing.  Lots of stocks do it, and do it well. But Hewlett-Packard is clearly trying to compensate for an utter lack of organic growth prospects and management's inability to grow HP on the merit of their ideas. It's hard to argue that some $30 billion spent on Acquisitions since 2008 is anything other than change as the illusion of progress.

Undoubtedly, board members will argue that Hewlett-Packard is trying to diversify its operations to achieve economies of scale and expand their service offering.

Of course, those folks should probably stop justifying their behavior and listen to companies like Cisco (CSCO). I’ll let CEO John Chambers do the talking (taken from this report on CNBC):

"When you're growing, let's just say for purposes of discussion, in the high teens, you can afford to bet in many areas. When you're growing in a lower number -- just for purposes of discussion, let's cut that number in half -- you can't afford many of the areas. So we're going to cut back on the number of priorities, get very focused on our top five (and) grow it through."

There’s nothing new about good corporations getting a little too fat and unfocused. Heck, even Wall Street darling Apple (AAPL) had its moment of corporate disarray. The iconic tech company was on the verge irrelevancy in 1997 before it called Steve Jobs back to the corner office. But as you can watch Steve Jobs say in his own words in this YouTube video (the speech starts around the 7:00 mark), while "Apple’s not as relevant as it used to be everywhere, but in some incredibly important market segments, it’s extraordinarily relevant."

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In short, Steve Jobs didn’t save Apple by rethinking the company but returning to its roots and focusing on what it did best. Neither did Howard Schultz overthink things when he came back to streamline Starbucks (SBUX), and if John Chambers keeps his job it will be because of what he cuts - not what he creates - in the months and years ahead.

These CEOs didn't have to catch lightning in a bottle. They simplified things, and returned the companies to growth by using addition by subtraction. Innovations like the iPhone or Via instant coffee came later, as a result of a renewed corporate mission and less "noise" in the board room.

Unfortunately, HP hasn’t gotten that memo. Instead, it continues to spend increasing amounts of money for the next big thing – not realizing that too many big things will actually cave the roof in.

The company announced a $10 billion buyback in 2010, and executed over $4 billion of that plan. Just weeks ago it announced plans to buy back another $10 billion in shares. Yes, HPQ had a $12 billion in cash as of this spring… but where is that money coming from in light of this $10 billion buyout deal unveiled this week? Was the buyback plan just a PR move to cheer up investors? 

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In earnings Thursday, Hewlett-Packard lowered its revenue forecast for the year, which hurt the stock. But more disturbing was the sideshow that surrounded these announcements. After rumors surfaced that HP was considering spinning off its PC business, the company confirmed talks with a surprise press release – that just so happened to dropped the bomb about killing its its WebOS mobile business on top of disclosing earnings about a half hour before its scheduled time to report numbers.

Who the heck is running this operation?

That question has been asked many times in the last several years. Carly Fiorina was forced to resign as chief executive officer and chairwoman in 2005 following "differences (with the board of directors) over how to execute HP's strategy," according to a corporate press release. Funny to think they had one, given the way things have shaken out.

Then in 2010, CEO Mark Hurd resigned amid controversy over sexual harassment claims and shenanigans over expenses - which managed to overshadow his silly buyout of Palm, among other interesting moments in his tenure.

It’s one failure in leadership after another.  And this leadership vacuum is perhaps the most disturbing things for shareholders. Because until HP gets some adult supervision, it will continue to make stupid and lazy business moves – and share prices will continue to suffer.

Jeff Reeves is editor of InvestorPlace.com. Follow him on Twitter via @JeffReevesIP and become a fan of InvestorPlace on Facebook.

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