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HP Writes Down $8.8 Bil, Says Autonomy Cooked the Books By Jennifer LeClaire November 20, 2012 2:10PM     Details of massive corporate melodrama and a virtually unbelievable financial loss are unfolding for HP surrounding its acquisition of Autonomy. An intense internal investigation by HP, including review by PricewaterhouseCoopers of Autonomy's financial results, has led HP to believe that Autonomy was substantially overvalued.   Related Topics HP Autonomy Acquisition Earnings Meg Whitman Leo Apotheker Latest News What's in Store for Apple's iOS 7? Reality TV's New Stars: Small Biz Soundbars Up the Ante on TV Sound Google Glass Raises Privacy Concerns Pentagon Gives iOS 6 Security OK It has all the earmarks of the next corporate scandal: Autonomy cooked the books, according to Hewlett-Packard , which has taken an $8.8 billion write-down on its 2011 acquisition of the U.K. company for more than $11 billion. The write-down appears in HP 's latest quarterly earnings statement. More than $5 billion of the impairment charge is linked to what HP called "serious accounting improprieties, misrepresentation and disclosure failures discovered by an internal investigation by HP and forensic review into Autonomy's accounting practices prior to its acquisition by HP. The other $3.8 billion is linked to the recent trading value of HP stock and headwinds against anticipated synergies and marketplace performance. "HP is extremely disappointed to find that some former members of Autonomy's management team used accounting improprieties, misrepresentations and disclosure failures to inflate the underlying financial metrics of the company, prior to Autonomy's acquisition by HP," the company said in a statement. "These efforts appear to have been a willful effort to mislead investors and potential buyers, and severely impacted HP management's ability to fairly value Autonomy at the time of the deal. We remain 100 percent committed to Autonomy and its industry-leading technology." Autonomy Overvalued HP launched its internal investigation into these issues after a senior member of Autonomy's leadership team came forward, following the departure of Autonomy founder Mike Lynch, alleging that there had been a series of questionable accounting and business practices at Autonomy prior to the HP acquisition. This individual provided numerous details about which HP previously had no knowledge or visibility. HP initiated an intense internal investigation, including a forensic review by PricewaterhouseCoopers of Autonomy's historical financial results. As a result of that investigation, HP now believes that Autonomy was substantially overvalued at the time of its acquisition due to the misstatement of its financial performance, including its revenue, core growth rate and gross margins, and the misrepresentation of its business mix. "This appears to have been a willful effort on behalf of certain former Autonomy employees to inflate the underlying financial metrics of the company in order to mislead investors and potential buyers," HP said. "These misrepresentations and lack of disclosure severely impacted HP management's ability to fairly value Autonomy at the time of the deal." (continued...) 1  |  2  |  Next Page >   Tell Us What You Think Comment: Name: Tom: Posted: 2012-11-21 @ 3:45pm PT @PK: You're exactly right. HP is a great company but it's tough to believe they could have made a mistake like this. pk: Posted: 2012-11-21 @ 2:39pm PT If you are prepared to pay $11B for a company, shouldn't you be smart enough to look at their books and be able to discover these improprieties before you sign a check for such a huge amount? Also Visit: iPad Info Center Billions of Bytes Mobile Device Now Apple Info Center TopTechWire.com Salesforce.com is the market and technology leader in Software-as-a-Service. Its award-winning CRM solution helps 82,400 customers worldwide manage and share business information over the Internet. Experience CRM success. Click here for a FREE 30-day trial.  Enterprise Hardware 1.   Pentagon Gives iOS 6 Security OK 2.   Cisco Q3 Net Income Rises 14 Percent 3.   HP and SAP Team on HANA Database 4.   Stand Turns iPad Into Cash Register 5.   On the Dell-Icahn High Wire Act >

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Network Security Spotlight

Syrian Electronic Army Hacks Financial Times The Financial Times is the latest victim of the Syrian Electronic Army, a group that supports Syrian President Bashar al-Assad. The U.K.-based newspaper said a blog and its Twitter accounts were hacked.   Patch Tuesday Hyper Focuses on IE 8 Microsoft on Tuesday issued 10 security bulletins that fix 33 vulnerabilities. These updates include MS13-038, which will address the Internet Explorer 8 issue described in Security Advisory 2847140.   Surge of Venture Capital Buoys Tech Security Sector With companies and governments spending billions to repel cyberthreats, a surge of venture capital is pouring into companies developing cybersecurity technologies, the front line of the conflict.

Enterprise Hardware Spotlight

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Mobile Enterprise Spotlight

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Enterprise Technology Spotlight

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