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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.
She wasn't the CEO of HP when the acquisition happend this one isn't her fault.
500 dollar reward for tip(s) leading to the arrest of the person(s) who stole my sig.
She wasn't the CEO of HP when the acquisition happend this one isn't her fault.
It's at least partially her fault. Per the FA:
In an interview with CNBC, Whitman said she regretted voting to approve the deal with Autonomy,
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.
She wasn't the CEO of HP when the acquisition happend this one isn't her fault.
Nor has she "run any other companies into the ground". Ebay's revenues increased by 200000% while she was CEO. Meg Whitman is not Carly Fiorina. Unlike Carly, Meg has a solid track record as a successful CEO.
Here is the important line from the article you quoted:
"The implied valuation of the company is equivalent to 47 times the pre-tax profits earned by Autonomy in the 12 months to June this year."
If you buy a company on valuation terms like that, the way HP did, whoever voted for the decision should be held accountable by their stockholders and be facing jail time. If it happened because Autonomy sold them some story about future profit magic and they bought it, that does not change the fact that HP was criminally negligent in paying that much for a company.
Example: PayPal lets you open an account with minimal information, and lets you send money to that account no limits.
Now suppose you're a European citizen. The second you receive more than 2500 euros in your account, they're going to lock it and ask you to provide extra information to prove who you are.
They do this *after* they let you open the account, and *after* the money is in said account.
Then, if you can't or won't provide the information they ask (passport, proof of address), they'll lock your account with your funds in it. They'll only allow you to get the funds after 180 days, and you must initiate the process, or they'll just keep the money.
A bank would never be allowed to do such a thing. They'd have to verify who you were *before* they gave you an account, and they would never be allowed to lock your funds for half a year _after_ you received said funds. Unless you were part of a criminal investigation, of course.
No...Ebay eventually made money on the Skype purchase.
They bought for 2.6 billion in 2005
Sold 70% of it for $1.9 billion in 2009
Made an additional $2.55 billion when Microsoft bought the remaining 30%.
So they actually made 1.85 billion on an initial investment of 2.6 billion. Not terrible over 7 years.