Martin comments on the news out of HP about the write-down of the Autonomy purchase price by $8.8 billion:
“The wording is very definite. HP are not just raising the possibility of misrepresentations but is stating that they occurred. The writedown for Autonomy is around $5 billion, or around half the purchase price. It seems that someone internally within the Autonomy senior management blew the whistle. HP have reported the issues to both the Securities and Exchange Commission in the USA and the Serious Fraud Office in the UK. HP states that it is still committed to Autonomy, but then it could not really say anything else without having to write down even more of the purchase price. It is also worth recalling that in September 2011 Oracle released a press release about a presentation given by Mike Lynch to Oracle in which the company stated that the market value of $6 billion was way too high, let alone the premium that HP paid on top of the market value. It is not only the Autonomy Board of Directors that will have some questions to answer but also Deloitte as Automony’s auditors and the senior management team of HP at the time and their advisors. There was clearly not enough due diligence on the part of HP.
It is sad to see this sort of problem sour the reputation of Autonomy.“
Not good for HP. Not good for Autonomy’s customers. Not good for the industry.
Categories: Industry Updates