US Department of Justice now investigating HP's Autonomy acquisition 26
A little over a month ago, HP announced that they were writing down $8.8 billion from "improprieties" in their 2011 acquisition of UK software firm Autonomy, and this week the United States Department of Justice has opened an inquiry into HP's allegations. Those allegations are that Autonomy engaged in accounting fraud that dramatically increased the perceived value of the firm, leading HP to overpay by several billion dollars when they executed their $11 billion purchase.
The Autonomy writedown was the third multi-billion paper loss for HP in a year, following up on a $3.3 billion loss on webOS after abruptly canceling hardware development and an $8 billion loss stemming from the 2008 purchase of EDS. Through 2012, shares of HP have declined 45%, despite dumping floudering CEO Leo Apotheker for former eBay chief Meg Whitman.
According to a filing by HP with the SEC, the DOJ investigation into the Autonomy acquisition began on November 21, 2012, the day after HP publicly leveled accusations at the former leadership of the software unit (Whitman fired Autonomy CEO Mike Lynch in May of 2012). Unsurprisingly, HP claims to be cooperating with agencies investigating the alleged malfeasance. In addition to the DOJ probe, HP also says they've submitted their evidence to the United Kingdom's Serious Fraud Office and to the US SEC.
We have every expectation that this is going to be a long, drawn-out slog for HP, and that they're not likely to get much of their billions of dollars back. A group of disgruntled HP shareholders have filed suit against HP, alleging the company didn't do its due diligence, and Lynch has publicly fought back against HP allegations, demanding they release the evidence HP says they have of the improprieties. It's a cleve strategy that Lynch has employed, as HP's made to look publicly uncooperative when the evidence they've submitted to the authorities cannot be publicly shared while under investigation. And to think, HP cancelled webOS hardware development because they weren't willing to make the multi-billion investments needed for a chance at long-term success
Source: SEC; Via: Los Angeles Times; The Next Web
26 Comments
The never-ending leopocalypse...
hahaha Apothekalypse
RQ
I bet they wish they'd just invested that $11 billion in webOS...
they could have a big chunk of the mobile market right now if they did.
At the time of the autonomy purchase, there was nothing wrong with webOS that an $11bn investment couldn't have fixed in a timely manner, if the investment was spent wisely :)
Would for it to be discovered that Leo was getting kickbacks from the money he was flushing down the toilet...
hp should have continue investing in webOS... i think that by today we would be one of the top three OSs out there... they could even just turn back the Apotheker desition, and start making touchpad gos and windsornots... now it's a technology company that does not sell mobiles in a world where everybody needs and wants a good phone...
still we have some functionallities in our OS that are missing in other OS... specialy the Multitasking part... (i know we have many thing missing also) but when people sees what i can do with my beloved webOS they are amazed by the power of webOS.....
F**K Apotheker.... and HP they really dissapointed my... and still cotinues to...
RQ
Remind me to NEVER let HP help me with my financial planning.
That last sentence pretty much sums it up...and it also the reason why HP has essentially had zero mobile market share (excluding laptops, of course). In the meantime they have also lost billions in market value and billions on these other failed purchases (EDS, Autonomy). I won't say "karma"...but it is a bitch.
So sad the way HP has bungled webOS, especially considering all of the resources at their disposal. Its kinda like an idiot throwing a huge uncut diamond in the trunk of a car and letting it roll around there (and getting lost?) because he doesn't recognize its value.
Long live webOS. :(
Why is this still being talked about on a webOS site?
I wonder how many discovered webOS due to the fire sale, I know I did, so in some way leo did get webOS noticed. thanks to leo I bought 32GB touchpad and later from ebay charging dock and keyboard and case, and recently Pre3 and touchstone. I just bought an Ainol fire for experimenting with porting open webos.
WebOS I love it, I agree HP dont know what they lost until it was gone.
HP will be studied in business schools for years to come as an example of poor strategy
I hope impropriety is discovered & want to see Leo get time behind bars
producing Win 8 tablets is NOT going to reverse HP's fortunes
WebOs has many advantages as a mobile OS & HP's enlightened move making it open source needs more support from them
how such high hopes fail..wish palm never heard oif hp..glad I never added hp to my portfolio. They not only missed the boat with webOS..they are sinking fast...make that they sunk. Now that every other smartphone os will be running some form of a webOS product..makes you wonder how hp failed or will continue. Do they hold any more of palm/webOS patents? or did garnet get all the palm patents. HP will go down in history in the text book of what not to do
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