Hewlett-Packard Writes Off $8.8 Billion, Alleging Fraud

Shares of Hewlett-Packard (NYSE: HPQ  ) appear headed for a new 52-week low today after the company disclosed an $8.8 billion charge related to its acquisition of Autonomy. The stock was off nearly 12% pre-market.

"The majority of this impairment charge is linked to serious accounting improprieties, disclosure failures and outright misrepresentations at Autonomy Corporation plc that occurred prior to HP's acquisition of Autonomy and the associated impact of those improprieties, failures and misrepresentations on the expected future financial performance of the Autonomy business over the long-term," HP said in a press release reporting fourth-quarter and full-year results.

Last August, HP bid $10 billion in cash for Autonomy, which specializes in information management. Then-CEO Leo Apotheker canceled plans to use capital for share repurchases after announcing the deal.


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  • Report this Comment On November 20, 2012, at 10:39 AM, rhltx4 wrote:

    One has to wonder who did the due diligence on this deal. Sounds like a big-time lawsuit in the making.

  • Report this Comment On November 20, 2012, at 11:58 AM, TMFMileHigh wrote:

    From HP's PR agency:

    "In your piece, you reported that HP purchased Autonomy for $10B. Was reaching out with a correction: Currency fluctuations and other factors raised the price to $11.1B when it closed in Oct 2011."

    Fair enough, though the story is correct in that the announced purchase price was $10 billion.

  • Report this Comment On November 20, 2012, at 6:18 PM, TMFCop wrote:

    So glad they're being diligent about your numbers Tim because that $1.1 billion really changes the context of the story.

    Of course, they might have spent their time being a tad more diligent about the numbers they got from Autonomy then they would have to read all the press clippings to make sure every realized just how much they actually overpaid.

    Rich

  • Report this Comment On November 21, 2012, at 11:09 AM, TMFMileHigh wrote:

    "So glad they're being diligent about your numbers Tim because that $1.1 billion really changes the context of the story."

    Wait. What do you mean there's no +1 button for comments? Dammit!

    :-) Agreed, Rich

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