Autonomy misled HP about finances, Hewlett Packard says
Computer maker Hewlett Packard has asked US and UK authorities to investigate alleged misrepresentations of Autonomy's finances before HP took over the UK software group last year.
www.bbc.co.uk/news/business-20412186
So that THREE major takeovers by HP that have gone TU. Wonder what the common factor here is?
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And you cannot blame the CEO for this one. Well not one CEO. The company lost the HP Way too.
The last CEO to go came from SAP I think (called Apotheker) and was behind the stupid Autonomy purchase and wanted to get rid of PCs. He didn't last. He thought HP's future was software.... HP used to do well because of innovation and R&D. Doing little of those things now sadly.
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HP bought Compaq for megabucks - if they had waited they could have bought for a fraction of the price they paid. Lenovo paid little for IBM PC business.
HP cannot make money in PCs and other lowend hardware (eg printers as the bottom has fallen out of the prices) with their overheads.
The only kit that seems to sell at a premium is Apple at the low end and IBM mainframes at the top - HP hardware is in the middle competing with everyone else.
In services HP cannot compete at the high high end of the service market as they lack the skills and cannot compete at the low end as they are too expensive.
Autonomy was seen as a big bucks seller.........
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These days I spend a lot of time on such things.
Misstated revenue figures? Something wrong there. It seems unlikely it would be deliberately overstated because its 100% you will get caught as soon as the first years' audit and final figures are done.
And it would take serious and deliberate lying to get misstated revenue and historical growth figures through. Including collusion or incompetence from the vendors auditors and bank.
If it was mistakenly overstated, or stated according to the wrong principles, then that is what due diligence is for.
The figures will have been stated optimistically, but the vendor's team will have been asked to justify those figures during the process, usually before the BAFO. That includes justifying the growth and business plan.
All sounds a bit unlikely really.
I'd guess that HPs buying business plan used some of the statements and then the upside case was too optimistic. Sounds more like a DD team about to get slapped.
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HP are writing down debt. Easier perhaps to write it off against this rather than where it ought to be written off. End result for HP is financially the same.
They did probably overpay for Autonomy. And they wrote off other purchases in recent years like Palm too.
Maybe after getting rid of 10% of staff and these write-offs they can turn the corner? Probably not since the ink demand is down these days.
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The phrase due diligence comes to mind.
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Mark has said Due Diligence and DD a few times above. So reading the thread now it would come to mind ;-) They clearly didn't do much if any on this purchase. And what about Palm, EDS and Compaq?
Last edited by: rtj70 on Wed 21 Nov 12 at 22:52
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>> Mark has said Due Diligence and DD a few times above. So reading the thread
>> now it would come to mind ;-) They clearly didn't do much if any on
>> this purchase. And what about Palm, EDS and Compaq?
Sorry missed the one reference to it above - must try harder, like HP.
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They've got a right Sauce, I think they have had their chips.
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Not a problem for HP. They will just carry on with the endless cycles of redundancies which started after the EDS acquisition (and possibly before).
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A lot of the ones let go in the USA recently were not made redundant per se. They were allowed to retire early. Very early for some! Money was paid into the pension funds. Of course you cannot access the pension yet.
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HP & Autonomy - rtj70
