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Hewlett-Packard says itís the victim of fictitious accounting at company it acquired
WaPo ^ | 11/120/2012 | Unattributed

Posted on 11/20/2012 9:28:22 AM PST by mojito

Hewlett-Packard Co. said that a British company it bought for $9.7 billion last year lied about its finances, resulting in a massive write-down of the value of the business.

CEO Meg Whitman avoided calling it a fraud, but said Tuesday that there were “serious accounting improprieties, disclosure failures and outright misrepresentations at Autonomy Corporation PLC.”

HP is taking an $8.8 billion charge in its latest quarter largely to align the accounting value of Autonomy with its real value.

The revelation is another blow for HP, which is struggling to reinvent itself as PC and printer sales shrink. Its shares hit a 10-year low in morning trading.

Among other things, Autonomy makes search engines that help companies find vital information stored across computer networks. Acquiring it was part of an attempt by HP to strengthen its portfolio of high-value products and services for corporations and government agencies.

(Excerpt) Read more at washingtonpost.com ...


TOPICS: Business/Economy; Crime/Corruption; Extended News
KEYWORDS: autonomy; bookkeeping; cultureofcorruption; deloitte; fraud; globalism; hewlettpackard
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Uh oh. Bad news for the tech sector.

HP acquired a company for $10 billion that was only worth $1 billion.

Any holders of HP shares might consider getting rid of them.

1 posted on 11/20/2012 9:28:29 AM PST by mojito
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To: mojito

I think the move in that direction started pre market today. I was surprised given the amount of the charge, the fall was only about 12%.


2 posted on 11/20/2012 9:31:07 AM PST by Mouton (Voting is an opiate of the electorate. Nothing changes no matter who wins..)
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To: mojito

Gee Whiz! Where was HP’s due diligence?


3 posted on 11/20/2012 9:32:03 AM PST by No Socialist
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To: mojito

Sounds like someone didn’t do their research very well.

If the deal is too good to be true, then...


4 posted on 11/20/2012 9:32:26 AM PST by stuartcr ("When silence speaks, it speaks only to those that have already decided what they want to hear.")
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To: No Socialist
"Gee Whiz! Where was HP’s due diligence?"

Exactly what I was thinking. They missed a 90% overvaluation of the company?

5 posted on 11/20/2012 9:34:31 AM PST by circlecity
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To: No Socialist

Due diligence sometimes can’t beat deliberate fraud, which is what apparently happened in this case.


6 posted on 11/20/2012 9:34:43 AM PST by Truthsearcher
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To: mojito

I’m glad I didn’t take the job they offered me a year ago! I’m sure it’ll be on the chopping block soon enough.

I dumped all 25 shares I had of HP. Not much, but I don’t need to lose anymore from their garbage.

I used to be a stalwart supporter of HP, but they’re not even a shadow of the company they were 10 years ago.


7 posted on 11/20/2012 9:35:10 AM PST by rarestia (It's time to water the Tree of Liberty.)
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To: mojito

Well, Meg Whitman’s toast.


8 posted on 11/20/2012 9:35:57 AM PST by Menehune56 ("Let them hate so long as they fear" (Oderint Dum Metuant), Lucius Accius (170 BC - 86 BC))
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To: mojito

Who buys a business - large or small - without auditing the books? Nice going, Meg. You would have made a GREAT governor.....


9 posted on 11/20/2012 9:37:05 AM PST by Donkey Odious ( Adapt, improvise, and overcome - now a motto for us all.)
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To: mojito

Hmmmmm. Carly Fiowhatshername.....Meg Whitman......figures....


10 posted on 11/20/2012 9:37:14 AM PST by Gaffer
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To: Truthsearcher

I would think that any accounting firm that misses 90% over evaluation isn’t worth much. Hopefully they can get a refund.


11 posted on 11/20/2012 9:37:39 AM PST by No Socialist
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To: Donkey Odious
She didn't say they didn't audit the books. She said

CEO Meg Whitman avoided calling it a fraud, but said Tuesday that there were “serious accounting improprieties, disclosure failures and outright misrepresentations at Autonomy Corporation PLC.”

deceptive accounting, failure to disclose, and lying.

Failure to disclose is, imho, the worst. That means you couldn't audit it even if you wanted to. It's like buying a house with a cracked foundation that isn't disclosed. If you miss it, then it's your tough luck.

This is not to say that HP couldn't have done better, but if they don't go into court after some of that cash they paid for that company, THEN we'll know that they really were idiots.

12 posted on 11/20/2012 9:44:25 AM PST by xzins (Retired Army Chaplain and Proud of It! True supporters of our troops pray for their victory!)
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To: Donkey Odious
Who buys a business - large or small - without auditing the books?

“What I will say is that the board relied on audited financials. Audited by Deloitte — not ‘Brand X’ accounting firm, but Deloitte. During our very extensive due diligence process, we hired KPMG to audit Deloitte. And neither of them saw what we now see after someone came forward to point us in the right direction.”

Somebody's in really big trouble.

13 posted on 11/20/2012 9:45:34 AM PST by mojito (Zero, our Nero.)
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To: rarestia

“I used to be a stalwart supporter of HP, but they’re not even a shadow of the company they were 10 years ago.”

Ten years ago they were already down the tubes. The “witch” had already done her damage. The problem really started when they split off Agilent.


14 posted on 11/20/2012 9:46:00 AM PST by babygene
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To: mojito

Who’s watching the watchers?


15 posted on 11/20/2012 9:46:15 AM PST by dfwgator
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To: babygene

Worst laptop I ever bought was an HP, never again!


16 posted on 11/20/2012 9:47:22 AM PST by dfwgator
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To: mojito

TG, I dumped my HP shares 2 years ago.


17 posted on 11/20/2012 9:49:49 AM PST by fivecatsandadog (Don't let reality ruin your day.)
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To: Donkey Odious

Once a company’s had the books looked at Deloitte and Deloitte’s work audited by KPMG, what more can you expect them to do?


18 posted on 11/20/2012 9:51:51 AM PST by Bob
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To: circlecity

I think the valuation of many of these Internet firms are overinflated, but this seems WAY beyond just overvaluation. Although Facebook pulled a bit of a stunt with their valuation notes when they were doing their road show prior to their IPO. Their advertising revenue models were based upon computer users and did not include the proper valuation of users who access through mobile devices. They made the change the week before the IPO and it made a huge difference in their projections, but they didn’t make a big announcement about it.

Basic takeaway from all of this is that the stock market is no place for individuals. It’s a computer game probably no more secure than online poker, except you’re playing against thousands of investment houses with better information than you.


19 posted on 11/20/2012 9:56:18 AM PST by pie_eater
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To: Bob

So now we will have Sarbanes Oxly deux?


20 posted on 11/20/2012 9:56:18 AM PST by cicero2k
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