This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

HP Goes Radio Silent Into 2013 on Autonomy Debacle

In the wake of HP's writedown and fraud accusation, some in the media noted HP may have simply overpaid for the software and data analytics specialist.

Others such as Oracle (ORCL - Get Report) highlighted that Autonomy had been shopped to them, but that HP's initial $11.7 billion pricetag was "way too high". Notably, Oracle said the company's head of M&A, Douglas Kehring and its president Mark Hurd - a former HP chief executive - valued Automony at less than its $6 billion market value at the time.

Meanwhile, former Autonomy chief executive and founder Mike Lynch took to airwaves to mount a vigorous defense of the company's accounting. In an open letter to HP's board of directors, Lynch wrote, "It was shocking that HP put non-specific but highly damaging allegations into the public domain without prior notification or contact with me, as former CEO of Autonomy. I utterly reject all allegations of impropriety."

Lynch's criticism caused HP to quickly fire back with a second statement related to November fraud allegations levied against Autonomy.

"While Dr. Lynch is eager for a debate, we believe the legal process is the correct method in which to bring out the facts and take action on behalf of our shareholders. In that setting, we look forward to hearing Dr. Lynch and other former Autonomy employees answer questions under penalty of perjury," HP said, while noting that it will defer investigation to regulators like the DoJ and file its own legal action at "the appropriate time."

After HP's Dec. 27 10-K filing with the Securities and Exchange Commission, investors now know legal authorities will be investigating HP's claim of an accounting fraud perpetrated by Autonomy.

"On November 21, 2012, representatives of the U.S. Department of Justice advised HP that they had opened an investigation relating to Autonomy," HP said in its filing, which added that the company has "provided information" to the U.K.'s SFO and the SEC. "HP is cooperating with the three investigating agencies," the company adds.

While the DoJ's investigation signals investors will see a resolution to HP's multi-year debacle, that regulatory investigation may also prove to be a distraction in 2013 for HP and its CEO Whitman, as the company tries to execute on a make-or-break turnaround effort.

"It is extremely disappointing that HP has again failed to provide a detailed calculation of its $5 billion write down of Autonomy, or publish any explanation of the serious allegations it has made against the former management team, in its annual report filing today," wrote Lynch, in a Thursday statement.

Interested in more on HP? See TheStreet Ratings' report card for this stock.

Check out our new tech blog, Tech Trends.

-- Written by Antoine Gara in New York
2 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG
HPQ $29.76 -0.87%
ORCL $39.67 -0.10%
AAPL $114.64 -3.21%
FB $94.06 -0.08%
GOOG $630.13 -0.17%

Markets

Chart of I:DJI
DOW 17,550.69 -47.51 -0.27%
S&P 500 2,093.32 -4.72 -0.22%
NASDAQ 5,105.5460 -9.8360 -0.19%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs