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Meg Whitman Says HP Was Defrauded By Autonomy; HP Stock Plunges
McGruber writes "CNBC is reporting that Meg Whitman claims HP was defrauded in its purchase of Autonomy. 'We believed there is a willful effort on the part of certain members of Autonomy management to mislead shareholders when Autonomy was a publicly traded company, and to mislead potential buyers including HP,' Whitman said. 'We stand by the forensic review that we've seen,' she added. I wish her the same level of success I had when I filed an eBay claim."
Also covered at SlashBI, which names the write-down damage: $8.8 billion.
This is a love letter...
Please don't run any other companies into the groud. Please stop whatever you're doing and go home, and avoid public life as a CEO, or politician. You've both proven you don't know jack.
The world would be better off without either of you.
Thanks;
The rest of the planet.
If telephones are outlawed, then only outlaws will have telephones.
I find it hard to believe that the management of HP failed to uncover fraud of this magnitude during their evaluation in the purchase of Autonomy. What this really means is management failed to do their due diligence in evaluating Autonomy and now need to to distract from poor financial performance due to a lack of competence at the executive level.
Runesabre
Enspira Online
I remember waybackwhen I last used Autonomy's categorisation and search engine. It wasn't very reliable and I never thought it did a very good job - neither the categorisation nor the searching. It always felt like a triumph of sales over engineering. I was amazed at the sale price to HP when it happened. Maybe this is something different, but somehow it rings true.
So, an 8.8 billion write-down on an 11.2 billion purchase and they are only alleging that "serious improprieties", rather than something like "epic, the-whole-boardroom-is-going-to-federal-country-club-for-maybe-five-years-or-so, fraud"?
Either corporate PR drivel is unusually polite, or white collar crime is absurdly superior on a risk/reward basis compared to little people crime...
Do corporations even practice it anymore, or do they just leave it to the fast-dealing aquisition high-rollers within the company on the promise of big payoffs?
Somebody else's money.... It is about finance and accounting, and not technology. Hence finance dudes know more about the "cloud" as they see it from their office windows every morning...
Because it's one or the other.
Seriously, I hate to be sexist about this, but how often now do we have to see this pattern repeat before we acknowledge that hiring a catty, spoiled, narcissistic bitch to lead your company is a HORRIBLE FUCKING IDEA!
It's not much better under a catty, spoiled, narcissistic MALE bitch, sorry to point out.
Hiring the male equivalent -- an abusive, spoiled, narcissistic dick -- to lead your company is also a horrible idea, but companies do it all the time. And fail. It's not about gender, it's about being an asshat.
[Sir Garlon] is the marvellest knight that is now living, for he destroyeth many good knights, for he goeth invisible.
Mike Lynch, the former CEO of Autonomy, has had a "midas touch" with respect to companies he has been associated with. He is commonly referred to as the "Bill Gates of the UK." The short time I worked for Autonomy (after they bought Verity, my former employer) my stock options showed surprising appreciation. Like google, their business is based on unstructured search algorithms. But their algorithm (Shannon's Information Theory) is published and peer reviewed.
Care to give a solid example instead of a hollow-yet-snappy retort?
Why is everyone bashing HP and Meg Whitman for this? The purchase happened pre-Meg, and this write-off is a great decision on HP's part. There's a fair chance that the purchase decision wasn't even as poor as HP's making it out to be, and this write-off is just being maximized for tax purposes.
Hate HP for making us individual taxpayers pick up the slack, but don't hate them for being stupid (in this case).
Totally incapable of taking the blame for anything.
Ladies and Gentleman, your corporate class...
Kind of depressing hearing about HP.
Step 1. Buy a really expensive company.
Step 2. Ignore it for a year or so.
Step 3. Rationalizing how to dramatically throw it away.
Step 4. Profit? Whats a few billion $ between friends?
Here's a longgg list of HP acquisitions.
Some of the more notable ones that caught my eye:
Verifone 1997 $1.1 (billions)
Compaq 2002 24.0
P&G IT: 2003 3.0
Peregrin 2005 0.4
MercuryInter. 2006 4.5
Knightsbridge 2006 ?
Opsware 2007 1.6
EDS 2008 13.9
3Com 2010 2.7
Palm, Inc 2010 1.2
3PAR 2010 2.3
ArcSight 2010 1.5
Autonomy 2011 11.0
So have any of these actually been profitable for HP ?
I knew that Palm tanked (bye bye, WebOS).
I haven't heard good things about Knightsbridge.
Compaq seems like it was a break-even deal.
I worked at Autonomy for couple of months after they acquired Interwoven. Soon after acquisition all product roadmaps were frozen. So naturally all the Engg. Directors quit.One product was pulled from the market (Metatagger). Their entire business model is based on integrating several products to solve a search problem: Interwoven had a very strong product line up.(Thanks to Joe Cowan for selling us out)
Digtial Asset management(Media bin)
Records management(a spin off on Worksite)
Document management(Imanage Worksite, which Interwoven acquired)
Web content management(TeamSite and LiveSite)
Content publishing(OpenDeploy)
All frozen so that Autonomy's IDOL search engine can be sold as a Enterprise search engine targeting customers like BBC, Coca cola..
Who cares about the customers of those products, right.
Once a solution is sold with no testing(release cycles usually last one sprint 3-weeks max) and any support and bug fixes, customers are asked to pay for it, if they don't pay, look for other suckers, there were many when you promise seamless integration and enterprise search within a 3 weeks timeline, who wouldn't bite.
Working on such a schedule gave me nothing more than long hours, dissatisfaction and stress. I laughed my ass off when I heard about HP's valuation of Autonomy.
Fraud is illegal and immoral. Did Ayn Rand claim otherwise?
I used to work for Autonomy. I have no sympathy for them.
My little article is here
After Autonomy's lawyers bullied me and anyone who supported me to take my article off line. I eventually lost my net access after Autonomy complained to BT, my ISP; they never issued an explanation or apology but still took money from my account. It took years and a letter to the BT chairman before I got a refund.
The article was originally subtitled "Stress Is More Fun" but seems to have got lost; if you read the article, you'll find out why it had this moniker. To find out what others think, look at Glassdoor
My web domain.
I'm just making a wild guess here, but maybe upper HP management decided that Autonomy was the only possible means of getting HP back on track. This probably filtered down the chain of command to the people doing the investigation. They may have just chosen to gloss over anything that seemed funny because they were convinced that management did not want to find any problems as if this acquisition didn't go through, HP was going to get beat up financially in the stock market and more layoffs were likely. Or we have to accept that Autonomy was just insanely good at hiding their malfeasance even though various stock traders had been shorting the stock for months because they felt their financials were fishy and somehow the traders figured out what the investigators couldn't. I find that unlikely.
I see this as kind of a variation on the way that decisions sometimes got made in the old USSR. During the days of the Soviet Union, bureaucrats got into the habit of anticipating the needs/wishes of their superiors. I'm guessing that there's probably a culture of fear in HP where the masses are afraid of layoffs and those at the top probably shoot the messengers when they get bad news, so this was a natural outcome.
"Autonomy"? I thought we were buying "Anonymous"!
http://alternatives.rzero.com/
Ok, she is not directly responsible for this fiasco although she does admit to voting for the sale. Just seems odd that one bad move after another seems to follow her wherever she goes. Honestly, I think that her and Carly are locked in a fierce battle for worst CEO of all time. Oops...look out...Balmer is closing fast...
The $8.8 billion Autonomy write-down is "only" about 127% of the $6.9 billion quarterly loss.
Care to give a solid example instead of a hollow-yet-snappy retort?
John Sculley
Recent studies have shown that there are many similarities in the personality traits of psychopaths and successful leaders. The problem is where the fine line lies - or where it is put for a given company/nation.
It's easier to be a result of the past, but more fun to be a cause of the future! http://www.spacefinancegroup.com/
This is equivalent paying over Blue Book value for a stolen car that is not only on fire, but is also involved in a high-speed chase with the police during the purchase.
1. You don't buy a company or its projections or its but instead your buying its balance sheet.
2. Make sure to do an audit of its balance sheet
3.If you don't follow point 1 and point 2 its fair to say you have no clue of what is it that your buying
4.Remember there are no facts in accounting only estimates hence open to extensive debate/manipulation (even bank account values may differ between what you show on book and what bank says you have in your account)
Anyway its not hard to see HP's PC business go to China, like Lenova after a quasi state backied Chinese firm makes them 'an offer you cant refuse'
They should sue them! Oh wait, they own them. Damn, lol. My company actually did an even stupider, even more damaging acquisition in early 2011 so I can't laugh that hard but seriously, we have 4 servers and like 100 employees. When you scale up even higher, you should have the resources to look into this size of deal beforehand. I think she's just pulling ideas out of her ass so it looks like she's some big innovator and not properly reviewing them before implementing them. It's the "let's stop making desktops....aw fuck it, keep making desktops" kind of quick decisions that are going to get her ass fired.
It never ceases to amaze me how often this happens. I have seen it first hand during an acquisition I was aware of, and here it is at HP. In the case I was aware of, my co-workers and others were doing everything we could to illuminate the problems before the acquisition went through, but the concerns fell upon deaf ears. It took years to clean up that mess. Of course the senior management who were responsible for the acquisition came through it unscathed, while the rest of us worked our asses off to "make it work". It looks like the same thing happened at HP.
As an executive, these people are paid to take care of these things. They are supposed to be able to handle M&A work. That is what all of those fancy degrees and business school is for. In the tech world, if you say that you can build an environment and then fail, it is obvious and you get fired. Yet some how in the C-suite world, if you say you can build a company and fail... nothing happens. I am totally in the wrong profession.
Shut up Meg.
My warped mind goes there every time I see her name in an article.
If I were God, wouldn't I protect my churches from acts of me?
keep the money when you gamble, but get taxpayers to bail you out is a scam that needs to end.
"Culture of Fear" has been the unsaid logo of HP for the past 15 years. That, and "Screw the HP Way"... So yeah, good guess... :)
http://www.beanleafpress.com
SlashBI - for managers unsure of their sexuality? SlashBI - for nerds to double their chances of pulling?? SlashBI - because jumping the shark has jumped the shark???
a bg cloud in the sky whit once in the wil a thunderstorm, perhaps on killer walking ore moving not even an army like cars whortless they seams 9 biljoen end not even wordt 1 biljoen jea worldess business only for youre paycheck end now security
Trying to convince me that you examined and investigated a target with your top notch professional team and then did the deal and you bitch about it is an ADMISSION OF FAILURE.
The CEO and the entire due diligence team should be canned along with board members who were involved in the deal.
Steve Jobs.
Not the best example? He was all the things you list, just successful.
John McAfee 'It was like that time I hired that Bangkok prostitute; to do my taxes, while I fucked my accountant'
Moral: Never hire an asshat without a working reality distortion field.
John McAfee 'It was like that time I hired that Bangkok prostitute; to do my taxes, while I fucked my accountant'
Mod this up. It's fascinating!
We know where leadership by an anti-intellectual "strongman" who scapegoats minorities and likes boisterous rallies goes
That's why you do due diligence. They're object is to make the company look as good as possible. Your object is to ferret out the truth. You failed. Don't blame them, accept and learn from YOUR failure...
From the link above: "The truth is that Mr. Lynch came to Oracle, along with his investment banker, Frank Quattrone, and met with Oracle’s head of M&A, Douglas Kehring and Oracle President Mark Hurd at 11 am on April 1, 2011."
The Oracle executives didn't realize it was all a joke.
The statement that caused me most concern was, "'We stand by the forensic review that we've seen." Excuse me? Somebody didn't look closely enough. Wouldn't a deal this big require a bond? Were I an HP shareholder, that statement would start my petitions to the BOD that Meg should go. Were I an HP shareholder, I would expect at least a statement like: "We have commissioned an independent review to insure that our forensic accountants used due diligence. HP will actively support the authorities with appropriate jurisdiction in the prosecution any fraud." Hindsight is always 20:20, but the shareholders deserve a specific analysis of what went wrong and assurance that the company will support prosecution of fraud.
Ummm I have a company it makes aaahhh $100 billion a year selling errr ping-pong balls online. Yeah. That's the ticket!
I'm willing to sell for only $10 million.
Yours Truly,
Tommy Flanagan
Sig. Sig. Sputnik
Your part of the reason IT has such a high churn rate.
30c is NOT an acceptable temperature for an office, sure it can happen during extreme weather from time to time but in normal companies, everybody then works together to make conditions tolerable. Extra ventilators, portable AC's.
IT needs all the people it can get and being a programmer is NOT supposed to be a stock exchange trader type job. Constant stress is not good for a job that relies a lot on creativity and deep thought.
Your arguments don't even hold any water because Autonomy ended up failing. If all their mis management and "though guy" attitude had worked it might have been a different story, but it wasn't. Instead a once promising IT company was middle managed to death. The story has had far more exposure in the British press, the above story might be a bit extreme but it doesn't stand alone.
If you ever get to have to manage people and I hope you never do, you will have to learn it involves dealing with all kinds including people who don't think a developers job should involve Seal type hazing. A good manager can manage all kinds, adjust to their needs to get the best performance out of them.
These managers obviously couldn't. Hint? Why did you think they went after him? Because they couldn't deal with the spanish and dutch guy so they unloaded on him. It is a typical weak managers solution, put the blame on the employee you can crack, either he fixes it and you look good or he breaks and you got a scapegoat.
MMO Quests are like orgasms:
You may solo them, I prefer them in a group.
They are done. They are Alcatel and Xerox. They are profoundly broken and no amount of strategizing the paradigm and clousourcing the B2B experience is going to fix that. HP is now just a brand with nothing behind it and dysfunctional organization that doesn't know what the fuck its doing behind it.
They finally reached the critical mass of disorganized bullshit and mismanaged acquisitions run by a senior staff of psychopathic feudal warlords who do nothing except protect their own shit while the CEO, is busy molesting secretaries or running for public office.
Are you sure it's not vice versa?
From the link above: "The truth is that Mr. Lynch came to Oracle, along with his investment banker, Frank Quattrone, and met with Oracleâ(TM)s head of M&A, Douglas Kehring and Oracle President Mark Hurd at 11 am on April 1, 2011."
The Oracle executives didn't realize it was all a joke.
You're sure they didn't send them over to HP after this meeting?!
Moral: Never hire an asshat without a working reality distortion field and a profound ability to choose and motivate very skilled but diverse people into working extremely hard to make the right thing at the right time.
Jobs' hat and ass is a bug not a feature, but he did have features.
Your part of the reason IT has such a high churn rate.
30c is NOT an acceptable temperature for an office, sure it can happen during extreme weather from time to time but in normal companies, everybody then works together to make conditions tolerable. Extra ventilators, portable AC's.
No, its not an acceptable temperature for an office under normal conditions. But the fact that the GP was feeling faint due to 30C temperatures in the office reeks of melodramatic exaggeration. That, or a serious health condition that ought to be addressed.
IT needs all the people it can get and being a programmer is NOT supposed to be a stock exchange trader type job. Constant stress is not good for a job that relies a lot on creativity and deep thought.
No job is worth constant stress. I never said that the work place was healthy. I wasn't there, I can't say for sure. All I can tell you is that the GP's post sounded like someone crying because they didn't get their way. So what if you got reassigned to a new project, or you have to maintain someone else's work. That does not mean that you are not a valued or useful employee.
Your arguments don't even hold any water because Autonomy ended up failing. If all their mis management and "though guy" attitude had worked it might have been a different story, but it wasn't. Instead a once promising IT company was middle managed to death. The story has had far more exposure in the British press, the above story might be a bit extreme but it doesn't stand alone.
So you are saying that this person did not seem remotely melodramatic about their situation? And that its not a bit extreme to go to your manager because people are asking you if you have made any progress on your assignment? And its okay that the GP didn't go to their manager when they had nothing to do, and instead started working on their own (on a project they were removed from previously), and then got frustrated with the lack of help? Management is a two way street. If you have nothing to do then you had better ask, in writing. At that point feel free to look for something productive to do until you hear back from management. The GP made no such attempts, at least not that they discussed in their post.
If you ever get to have to manage people and I hope you never do, you will have to learn it involves dealing with all kinds including people who don't think a developers job should involve Seal type hazing. A good manager can manage all kinds, adjust to their needs to get the best performance out of them.
I have managed teams before, and I understand that every single employee is different, and they all have different needs (besides compensation and free time). However, no manager wants someone who requires nothing but hand holding, and gets upset if someone asks you "How's your progress coming?" before they say hi. Maybe it's not the most polite way to start a conversation, but the GP never said they were asked more than three times a day. For all we know, this was the manager's poorly worded attempt to be helpful and supportive. They may have been concerned about the GP's performance and may be proactively looking for issues. Either way, a verbal overview of your progress is not unreasonable if you're in a small team (or as in the GP's case, working solo on a project). And I beg you to demonstrate how the GP was hazed. Everyone was subjected to the same temperature. So what was it? The need for status updates?
These managers obviously couldn't. Hint? Why did you think they went after him? Because they couldn't deal with the spanish and dutch guy so they unloaded on him. It is a typical weak managers solution, put the blame on the employee you can crack, either he fixes it and you look good or he breaks and you got a scapegoat.
There is no indication that there was any problem with the Dutch guy other than the fact th
I'm surprised someone on the HP board hasn't found out a ton of dirt on every one of the Autonomy Board of Directors and their families. Leak it slowly to various ambitious prosecutors who want to 'clean up corporate crime'. Other non-legal options shall not be discussed here on a public forum.
James Chanos http://en.wikipedia.org/wiki/James_Chanos shorted Autonomy before HP bought it. When HP overpaid, he had to cover short, but made good when he shorted HP. Maybe HP should have consulted with him before the purchase as he sells his research. Chanos is the one who shorted Enron and Worldcom.