HP Takes A $9B Hit

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Taking a $9 billion hit on a company you just bought for $11 billion is not the greatest way to "turn things around." Smooth move HP. :eek:

It's had to take a nearly $9 billion writedown on the value of one of its biggest assets, the British software company Autonomy, following the discovery of serious accounting "improprieties." These concerns cast major doubt over the $11 billion sum that HP coughed up to purchase Autonomy last year, and have a direct impact on both these Q4 earnings and the reported earnings for 2012.
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If I were an HP investor I would be pissed right now. How can you pay so much and not gone through their books with the best forensic accountants that money can buy?
 
It's easy to think that a CEO (or other high executives) don't really make much of a difference, that companies are successful with good employees, good ideas, good execution, etc. But, more and more I see the difference between good leadership and bad leadership. I mean, HP is the biggest computer company in the world, you'd think they'd be able to make good strategic decisions once in a while, but every time they're in the news it's because they've made another bone-headed move. Do they just make 11 billion dollar deals with their buddies at cocktail parties and hope for the best?

Conversely, I work for a fairly large company that's made bunch of acquisitions over the last few years. They all seem to be good fits for the company and, mostly, seem to be making money. I'm still not sure that big business CEOs deserve 50 million dollar a year compensation packages, but I'm certainly starting to see that it's not a job that just any old dude in a suit can do.
 
Why did HP need to buy Autonomy in the first place? I mean, if you need a DMS, there are cheaper ways to get one! ;)
 
imanage/autonomy has been being handed around for the last 5 years... hp just got caught holding the bag when time ran out. should be fun to watch, most law firms run their software.
 
ammosponge said:
imanage/autonomy has been being handed around for the last 5 years... hp just got caught holding the bag when time ran out. should be fun to watch, most law firms run their software.
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As much as I personally didn't think it was a good acquisition for HP, there really isn't anything wrong with the software that customers have purchased and are running.

If the accounting fraud and cover up are as deep as a $5 Billion cover up that neither KPMG nor Deloitte could find prior to acquisition, but took someone coming forward after the CEO left to ferret out, well I think that it's likely that jail time may be involved.
 
HP, when you absolutely, positively have to buy all the shit companies out there, accept nothing less
 
Alyosha said:
It's easy to think that a CEO (or other high executives) don't really make much of a difference, that companies are successful with good employees, good ideas, good execution, etc.
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The catch that while Mr. Hewlett and Mr. Packard were alive, HP had the best employees, great ideas, great execution, etc. Sometime after Mr. Packard's death, the board turned into a complete disaster (probably looking for a killing next quarter, but certainly never concerned about the health of the company). Hiring Carly Fiorina and subsequent disastrous CEOs might have been the high profile moves to destroy the company, but the rot had likely set in well before that.

The silicon valley was born in hp's garage. You would never believe it from what the company has turned into.
 
Red Machine D said:
Or from using their products. They've made absolute garbage for the past few years.
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They've made nothing but garbage since about 2005 based on my experiences. Multiple laptops with thermal/cooling deficiencies, customer service woes, laptop exchanges because they can't send working replacement parts when a laptop did break, printers that clog up and ink that costs too much ... the list goes on. It did not matter if I bought a product from their consumer line or their business line. It all sucked.
 
I want to know how a company supposedly worth $11 billion racks up $9 billion in 'accounting improprieties.'
 
What does this mean? So they end up spending $20 billion for a company when they should have only paid $2 billion?
 
DeathFromBelow said:
I want to know how a company supposedly worth $11 billion racks up $9 billion in 'accounting improprieties.'
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Thats the problem, they are accusing them of fraud and duped HP into buying them. They reported incorrect numbers, and saying the sale wouldn't have happened if they didn't lie about the numbers.
 
As far as the products HP has been putting out, Mark Hurd was the one who cut HP's R&D budget to close to $0.00. His successor, Apotheker, did not change that trend. So, what can you expect when the only products you can produce are clones of what everyone else is shipping, and you have to produce the product cheaper to protect an already thin margin.

The moral of the US HP employees has been in the tank for years, as they watch their jobs being shipped off to some 4th world country. It began when Carly started offshoring US jobs and escalated when Mark Hurd refined offshoring to an art form. He did fail in his one goal though. He wanted to be the last US citizen employeed by HP (he came close though).

Apotheker was a joke, although not a funny one. However, he was smart. Smart enough to walk away with $30m severence for less than a year "running" HP.

Another issue with HP is they seem to change directions at a whim.
Back in 2000 they were a printer company. Then they became a printer and computer company. Then they wanted to spin off the computer company. Then they didn't want to spin off the computer company.

Earlier they wanted to get into phones, then they didn't want to do phones.

They killed off the Home Server product line overnight with little or no explaination.

They wanted to get into the tablet market. Oops, maybe not. Well, maybe yes. Well, maybe.

Any wonder why the company has lost 75% of it's value in the past couple years?

The HP management and board has been about as disfunctional as their role model, the US Congress!
 
Monk0101 said:
As far as the products HP has been putting out, Mark Hurd was the one who cut HP's R&D budget to close to $0.00. His successor, Apotheker, did not change that trend. So, what can you expect when the only products you can produce are clones of what everyone else is shipping, and you have to produce the product cheaper to protect an already thin margin.

The moral of the US HP employees has been in the tank for years, as they watch their jobs being shipped off to some 4th world country. It began when Carly started offshoring US jobs and escalated when Mark Hurd refined offshoring to an art form. He did fail in his one goal though. He wanted to be the last US citizen employeed by HP (he came close though).

Apotheker was a joke, although not a funny one. However, he was smart. Smart enough to walk away with $30m severence for less than a year "running" HP.

Another issue with HP is they seem to change directions at a whim.
Back in 2000 they were a printer company. Then they became a printer and computer company. Then they wanted to spin off the computer company. Then they didn't want to spin off the computer company.

Earlier they wanted to get into phones, then they didn't want to do phones.

They killed off the Home Server product line overnight with little or no explaination.

They wanted to get into the tablet market. Oops, maybe not. Well, maybe yes. Well, maybe.

Any wonder why the company has lost 75% of it's value in the past couple years?

The HP management and board has been about as disfunctional as their role model, the US Congress!
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Strangely, this is an odd - yet incredibly accurate account of the company summed up in the last... 7+ years. Nice way to sum it up in 1 paragraph worth of text :p

I'm serious, this guy is spot on.
 
Cyraxx said:
Strangely, this is an odd - yet incredibly accurate account of the company summed up in the last... 7+ years. Nice way to sum it up in 1 paragraph worth of text :p

I'm serious, this guy is spot on.
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Spot on indeed...

I know exactly why he's spot on. :D
 
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