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Autonomy Chief Says Whitman Is Watering Down HP Fraud Claims
McGruber writes "Possibly the wierdest tax-writeoff of the year happened when Meg Whitman claimed that her US-based multinational corporation HP had been defrauded by British-software firm Autonomy; Ms. Whitman and HP claimed an 8.8 billion dollar write-down. As the Los Angeles Times explains, 'HP acquired Autonomy in 2011 for $11 billion, a move it hoped would turn it away from its dependence on sales of computer hardware with its low profit margins, and into the more profitable business of software. However, the price HP paid was widely criticized for being too high, and in part led to the subsequent ouster of Chief Executive Leo Apotheker.' The wierdness continues — in its annual report filed with the U.S. Securities and Exchange Commission, HP claims that the U.S. Department of Justice has opened an investigation into HP's allegations that HP has uncovered widespread accounting fraud at Autonomy. However, The Guardian points out that former Autonomy CEO Mike Lynch claims that HP 'is watering down the accusations it had levelled against him over the accounts filed by his old software company.' Mr. Lynch also says that he has not been contacted by the U.S. Department of Justice, which HP claims is investigating the alleged fraud. Perhaps Slashdot's users can help make sense of this mess and help explain it to me?"
That conniving gristly old shrew is up to no good, as usual.
Perhaps Slashdot's users can help make sense of this mess and help explain it to me?"
You don't have to delve too deeply into this one, to be honest. The company took a risk. It lost at the gambling table. Badly. And now it's looking for someone, or something, to blame. And the only way to reduce their debt load without screwing someone over a barrel is if some vaguely-defined "fraud" is found in the accounting books, thus saving HP of a lot of tax money and reducing the liability. Everything else is smoke and mirrors.
#fuckbeta #iamslashdot #dicemustdie
Someone is lying
"When life gives you lemons, don't make lemonade. Make life take the lemons back!" -- Cave Johnson
HP fucking things up and being scummy. And fucking up being scummy too.
they know everything about everything, don't you know?
Sent from my ENIAC
For the love of god, it's W-E-I-R-D.
On the sell side, we have this.
I'll let others comment on the buy side.
HP wants to be what IBM used to be (and still struggles to be), the single source provider for their customer
Autonomy looked like a great opportunity, but just like inexpensive hardware has undercut high-end server sales, open source solutions and tens of thousands of developers using those tools have undercut their market and dimmed the rosy projections that made HP willing to lay down so much cash
I think that this is less about Autonomy's shrinking value and more about HP's willingness to pay any price to enter new markets and their failure to recognize an opportunity to drive down the selling price by being willing to walk away from the deal
On Autonomy's part, they 'enhanced shareholder value' and returned a greater profit to them by negotiating the highest selling price possible, Do we really expect corporations to behave differently?
Wherever You Go, There You Are
Ever since HP bought Compaq (a deal that brought them nothing that they didn't already have) for more than the Chinese later paid for BM's PC division, they have been on a downhill spiral. And the cause of the decline seems to survive by telling the board "don't fire me now, you need to see this through". Meanwhile she keeps taking millions for an inability to run a once great company.
I'm an American. I love this country and the freedoms that we used to have.
You spell it "weird", not "wierd".
C'mon people.
About 15 years ago I was buying an HP printer from Canada's equivalent to Best Buy and they were trying to do the usual crap warranty upsell. I told the guy, "For $10 off I'll take an HP product with no warranty." That was 15 years ago. I recently opened a cheap little HP inkjet and the included black cartridge had zero ink in it. I don't mean it had dried out but it had never contained ink as I cut it open and found no sign of ink. I didn't flip out or was even a tiny bit surprised. This is what I expect from HP products.
The same with HP laptops; I expect a mountain of bloated trialware that will be a huge pain to remove and a variety of other cheapnesses such as the whole split left shift key thing.
I also buy servers and with no experience at all with HP servers would simply not touch them with a bargepole due to my experiences with the rest of their product line. But back to their older products. I know people with older(10 years+) laserjets that just keep going and going; while I know others with newer colour laser jets where the red is fading due to dust buildup on a mirror buried deep inside the machine.
And don't get me going on the prices of toner and ink. So my guess is that HP is a company run by MBA types "proving" all kinds of "facts" using spreadsheets while leaving the basics such as loyal happy customers in the dust as those things don't spreadsheet very well. If you are wondering what I mean by the misuse of spreadsheets think about this scenario: You are HP and you have some new trialware product to add to your latest laptop. The product looks like it will make an average of $16.95 per machine. You expect to sell 300,000 units. Well that works out to 6 million dollars. Then you add another trialware column, and another, and another. Soon those machines are simply printing money. But how do you calculate the number of customers who will never buy another HP after realizing that they basically just bought the electronic equivalent to postal junk flyers? Not so easy to put that into a spreadsheet; you can but it tends to be built on more fuzzy information that can be tainted with optimism. My personal guess is that a goodly portion of high priced Apple's sales are built upon people seeing a machine that didn't come with Norton AV and its bloaty brethren. These technologically unsophisticated people then reason that it is worth double to not get this crap. I like Apple products so I am not casting aspersions and I also know that there are many other reasons people buy them both worthy and shallow but I know many people who have no inclination to waste one second fighting with their machine and value their time accordingly.
So when I hear that HP is squabbling over $11 billion that would potentially be detectable from the proper use of spreadsheets (accounting) I just laugh like a drain.
HP paid $11bn for Autonomy, despite Autonomy showing only $3.5bn of total assets (as of June 2011). HP recorded nearly $7bn of Goodwill (difference between the price HP thought it was worth and what the rest of the market thought it was worth) and surprise, surprise the market knew better than HP.
HP's story simply does not stack up - it would mean Autonomy were fiddling their books to the tune of $5bn on a $3.5bn balance sheet. Much more likely is that HP vastly overpaid and are now trying to shift the blame, I'd expect these charges to get even more diluted in the near future.
Ignoring all the bad decisions HP has made over the past 20 years, HP simply doesn't want to pay too much in taxes. Other large corps, like Intel, have used the multi-billion dollar write-down to escape taxes, course the rest of us will end up paying more.
Agrisea Tsunami - Epyc Servers... https://agrisea.net/products
Someone is lying
Also, Nobody is actually meant to read SEC Filings. They are really only looked at if there's a lawsuit--and then they are looked at reluctantly.
-- IANAL, this isn't legal advice, and definitely isn't legal advice for you. Also, Squee!
Or, and this has just occurred to me and might be a bit way out for Slashdot, are you thinking of the art of persuading another person to drop his or her underpants in an intimate setting?
From scarped cliff or quarried stone she cries "A thousand types are gone, I care for nothing, no not one."
I agree, provided that the user base is infinitely diverse. However, this is /., and so it is not. Hence my infinitely snarky sarcasm.
Seriously, I'm just weary of the infinity of speculation and judgmentalism that achieves the status of "information." This kind of post only serves that ilk, so I apologize if I felt moved to snark on it, but alas I must lower my expectations for the new and uber-gossipified /. since the passing of Rob Malda, who seriously must have passed away else he would not have let this become The New Geek Speculator.
Sent from my ENIAC
HP r dum?
"Nobody with half a brain would have paid that much for this pile of shite; therefore, we must have been defrauded."
See? It's simple. Blame someone else.
Habitual usage of psychoactive narcotics can impair brain functions and lead to other physiological problems and ailments and even death.
Like most big companies, HP is running out of new CEOs to find 'problems' to correct to 'explain' lack of profit to shareholders. What is fundamentally wrong is that in any given market, costs are likely to go up over time. You cannot sell the same product for the same price over quarters or even years. Technically you get around this by either introducing 'new' products with 'new' features or you pad some aspects of your business from other aspects.
HP has been cutting employee benefits and salaries for going on a decade now. Every quarter they cut to make the profit for the shareholders. At some point this needs a reckoning. That is likely going to be in the near future. The company needs to be split into different divisions to slough off the unproductive components - e.g. IBM getting rid of its computers and laptops division.
You can't be everything to everyone. If you try, you end up disappointing everyone. A CEO can only do so much and good employees will only stay so long until they are forced to find an alternative to save their sanity.
(1st sig) If this were a snappy sig, you'd be reading it right now. (2nd sig) I'm a karma whore. >Insert FUD here
This seems straightforward.
HP paid 11 billion dollars for something. They are now claiming it is actually worth 2.2, and that difference is accounted for by fraud on the part of the seller (essentially lying in their books to hide what it was actually worth). It's like going on a date with a girl and telling her you make 100k a year when actually you make 70. Or, as the case may be, telling her you make 110k when actually you make 22.
Now the thing is, some of the 'asset' they were buying was a brand name and other intangibles, so those are always of questionable value (AMD wrote off a few billion dollars in their ATI acquisition for this reason). If autonomy presented its brand and existing sales relationships as worth 8.8 billion dollars when they weren't, that's fraud. If HP is now claiming that they really aren't worth 8.8 billion dollars anymore (when they are) they're essentially defrauding the government, potentially quite legally as HP can kill the Autonomy brand and make it worth less. And if it's actually worth 8.8 billion dollars less, then they just wasted a bunch of shareholder money.
With all acquisitions you're trying to find something you can buy for less than it's actually worth, or will be worth in the future with enough investment on your part. Lots of people were warning that HP was paying too much, but the whole idea is that they figured (rightly or wrongly) that there was something there worth paying that much for. If you spend 180 bucks a share on apple stock on dec 31 2007, and looked at the price of 85 a share in march of 2009 you would have been thinking that was a really bad investment. Until it hit 700 bucks a share in september of this year and is now down in the 510 range.
"You can only manage what you can measure !!!!"
Of course, "customers cursing on product already bought" cannot be measured, so the MBA crapper ignores that aspect and continues to implement some "money-saving" scam.
Three years later he MBA crapper is surprised his company has been "developed" into the economic crapbin.
But that rot started when Dave Packard forgot the purpose of his little company and accepted money as the sole determinant of success. In his book he praises the MBAs. Companies have a useful lifetime, and HP's useful lifetime was consumed by 1995. I still remember Lew Platt waxing about "we have to reduce inventory", when HP was a technology powerhouse with HP-UX, PA RISC, semiconductor test, chemical analysis, medical instruments, electronic instrument group and all that.
MBA - learned intellectual shallowness.
..products such as MPE and Allbase/SQL, which could still be around and rake in billions, just like AS/400 (whatever they currently call it) and DB/2 still do.
But no, let's push the crap of Mr Larry and Mr Bill. Be THEIR sales force, betray your own product lines ! Betray your own engineers and scientists ! That's a good business plan, isn't it ??
Did I mention you can also kill your own, leading-edge, high-performance microprocessor architecture ? If you do that, it will reduce your management workload and capital expenditure. Plus it will rob your own company any competitive edge left, on the long run.
The fact is, that Whitman is a worthless MBA. She has left a trail of destruction, except at e-bay. Of course, e-bay had such a good thing going, that it was not surprising. But, HP is being brought down by her, similar to the way that IBM and others are going down.
I prefer the "u" in honour as it seems to be missing these days.
I would suspect fraud here, I find it hard to believe there has been this level of incompetence. I still have little respect for HP after the whole "pretexting" scandal a few years ago. I'd think there's a culture in the boardroom at HP that few would want to be part of. Two companies that have lost their way with no real leadership or innovation to bring them back to past glory.
This could just be synthetic accounting, shadow puppets included. Sounds like there's more to investigate here ...
Totally my mistake, so sorry - I guess the "magical" reference threw me off. (plants tongue firmly in cheek)
Sent from my ENIAC
"You don't have to delve too deeply into this one, to be honest."
You're right on that.
It becomes much clearer when one understands that the quote in the summary attributed to the former Autonomy CEO, Lynch, is actually from the Guardian. And, that "watering down" doesn't mean what the Guardian thinks it means (if one waters down an argument, they make it weaker than it actually is). Assuming someone got something right, what Lynch actually said was "Simply put, these allegations are false."
"National Security is the chief cause of national insecurity." - Celine's First Law
If you buy Agilent equipment, it always comes with HP workstations. I've also observed during visits to their internal labs that the staff use nothing but HP laptops.
it's not like he's going to admit wrongdoing if there was any. Why would he?
When HP first announced this, a bunch of analysts and bloggers highlighted things that HP's due diligence should have warning flagged.
So, despite our distaste for Meg Whitman, it seems premature to exonerate Lynch.
Dan Sabbagh, author of the original article, "Autonomy former chief: Hewlett-Packard is watering down accusations," at guardian.co.uk, does not seem to understand what "watering down" means. If HP were watering down the accusations against Autonomy's former chief, then the reality would be much worse than the accusations. What the former Autonomy chief was saying was that HP was bolstering the accusations, essentially meaning that the reality is much better than the accusations.
Mr. Sabbagh should either take some journalism, English, and logic courses, or else stop making a fool of himself and find some other line of work.
HP are complaining that they were defrauded of between 80 and 90% of what they paid for Autonomy. On a ten digit deal, surely they employed all the best accountants and lawyers around to check it out? I mean, $100 million on advisers is still only 1% of the deal. If they did, why are they not suing these advisers (possibly as well, but certainly first)? If they did not, they they really have only themselves to blame and all concerned (not just the top man) should be ejected without parachutes.
Consciousness is an illusion caused by an excess of self consciousness.
If Apotheker had been more of a politician and less an honest man, he would have sold the PC division for 1 dollar to Asus, Acer or the like and focused on the software biz. That is how IBM did it, and their SW business is a key contributor to profitability. Apotheker was quite right. But he had not read enough Machiavelli, apparently.
Search functionality into printers !! "Honey, could you please go to the printer and query for the cinema program this evening ? Your quick fingers can operate that three-button keyboard with ease !" "Also, I don't mind you wast 50 sheets of paper in the process as I did in the 1970 when I programmed against our Multics mainframe"
Carly-Style "invention", I guess.
Platt also decided it would be great to stop R&D on the PA RISC CPU and let Intel do that in the future. That was when PA RISC was the engine of rock-solid HPUX computers and regularly grinding the competition into the ground, performance-wise.
What Intel had going for them was massive sales numbers, Windows and economics. Platt essentially decided it would be a great idea to Raise The White Flag.
It's spelt weird.
Muffy can't seem to buy the California governor's office and couldn't lead a thirsty mule to a lake, much less a profitable and reputable business. Bye, bye bimbo. Take your stolen riches and sneak away down to La Jolla with your buddy Mit - why you even look alike :) She'll be out within six months - dollars to donuts.
..and obtain some AWS-based "server experience". Then set up some project and write about that in glowing words in your project list/CV.
"Marc Andreesen,..."
Yes, I do think so. Netscape was a single-trick pony. I know their webserver had serious security issues. I bet their other products sucked, too. All I can remember is "full virtual pointer access error" (or something to that effect) from their browsers.
You and your fellow fraudsters have shafted hard-working craftsmen, specialists and workers who care about the products they make for several years now. The lowlings slowly realize they have been thoroughly shafted by you and your buddies. So whenever they voice their anger, they must be smeared. I am sure you well-educated nastyballs can spin this into "communism", "nazism" or something.
Here is a gem of knowledge: People seek help from nazis and commies when they get the feeling that the establishment smugly ignores their suffering. Most people are very resilient and first whether they have made a mistake themselves, when they are in a bad situation. But when the 1% fuck up, they fuck up for the 99% also. There is very little the 99% can "change in their lives", when finance is fucked up.
Now, cry me a river for the 1% who first shaft everybody and then start to wine when they smell the Zyklon-B.
The fact is, that Whitman is a worthless MBA.
An MBA is a degree, not a person. Apparently to you going to school to learn about the techniques of managing a business somehow magically leads to a person becoming evil and stupid while clearly all engineers are paragons of honesty and competence by comparison. [/sarcasm] Grow up.
She has left a trail of destruction, except at e-bay
What "trail of destruction"? The only major company she has been in charge of prior to taking over the helm at HP is eBay which has pretty much been an unmitigated financial success. She came to eBay when it had 30 employees and $4 million in revenue and led it to having revenue of somewhere north of $4 billion by the time she left. That is a 1000X increase in revenue with net profits of over $1 billion. She has served on several board of directors (normal for a CEO of a major corporation) but there is no evidence of her actions causing a "trail of destruction" there. Perhaps you are confusing her with Carly Fiorina or Leo Apotheker both of whom clearly created serious problems for HP? I realize it is fashionable lately to bash the CEOs of HP (they often have deserved it) but let's lay the blame where it really is due, shall we?
HP is being brought down by her, similar to the way that IBM and others are going down.
While you can reasonably argue that Meg Whitman might not be the best person to fix the problems at HP or that her actions are not improving the situation for HP, virtually all the problems she is facing predate her tenure as CEO. She bears some responsibility as she was a board member during some of the most recent stupid moves but she only joined the board in January 2011 so even that responsibility doesn't go back very far. Put simply, she did not create most of this mess and your characterization of her is pretty much unsubstantiated by the facts.
As far as IBM goes, what on earth makes you think IBM is "going down"? IBM has been wildly profitable for the last 15 years and has profits of $15 billion on revenues of over $100 billion. IBM is performing fantastically well as a business, far better than HP, and is showing no signs of slowing down.
The buyer did 'due dilligence' on audited accounts. After audit, only target is auditor if accounts are illegal. However as always caveat emptor applies. This is a shift the blame try, which may rebound on HP.
Regards Eion MacDonald
I worked for Digital, Compaq, and HP, without moving desks. It was all down hill.
Just another old contractor.
--
If the lose-lose more strategy is optimal, you're playing the wrong game.