NEW YORK ( TheStreet) -- Happy Thanksgiving Dumbest fans! Hopefully you enjoyed a fantastic Turkey Day filled with friends and family, and are now working off all that bird by battling the Black Friday crowds at a mall near you. And speaking of thankfulness, you know what we here at the Dumbest Lab gave thanks for this Thursday while we were elbows deep in cranberry sauce and walnut stuffing? You guessed it, the overflowing bounty of dumbness bestowed upon us by our good friends at Hewlett Packard ( HPQ). Yes, the once-proud tech company offered us yet another amen moment this Tuesday when it recorded a non-cash charge of around $8.8 billion related to its purchase of U.K. software maker Autonomy last year. In its conference call, HP said the majority of the impairment "is linked to serious accounting improprieties, disclosure failures and outright misrepresentations" that took place at Autonomy prior to HP's taking it over. "These improprieties were discovered through an internal investigation after a senior member of Autonomy's management team came forward following the departure of
Autonomy CEO Mike Lynch in May," said HP CEO Meg Whitman, during the company's earnings conference call. The company's shares finished Tuesday 12% lower on the news. Improprieties our ass Meg! Woman up and call it a fraud if that's what you believe. Your stock is getting destroyed and famed shortseller Jim Chanos is dancing on your grave like he's at a P. Diddy party in East Hampton. This is no time to mince words. Your target, former Autonomy CEO Mike Lynch, is not pulling his punches in his defense, so why should you? Seriously Meg, check out what he said in in an interview with AllThingsD: "Basically, we reject completely the assertion of HP. It's completely wrong. The reality of the situation is that when HP bought Autonomy it had hundreds of people involved in due diligence, which was described at the time as 'meticulous.' And KPMG, Barclays and Perella were all involved there. And they've actually run it for a year. To somehow admit a $9 billion elephant in the room just beggars belief, frankly." See! It's now or never. Your fourth-quarter earnings of $1.16 a share may have exceeded Wall Street's profit estimate, but a two-penny beat is hardly a blowout and certainly not enough to knock this Autonomy hullabaloo out of the headlines. Not helping either is your tepid earnings outlook of 68 to 71 cents a share for next quarter, well below Wall Street's consensus view of 85 cents. So what are you going to do Meg? Huh? How do you plan to turn this battleship around before it sinks under the weight of all those stupid executive decisions? You know what. Don't answer us just yet. Why don't you think about it for a while? We have the entire weekend and a stack of turkey sandwiches to tide us over while we wait for you to figure out your future. Oh, and just in case you need a refresher course on how you arrived at the edge of this cliff, we pulled up some of HP's greatest hits from our 5 Dumbest lists of the past two years.
5. Whitman Channels Obama -- Originally published on Oct. 5, 2012 Why shouldn't Meg Whitman blame the previous administration for her economic problems? If it's working for President Obama in his race against Mitt Romney, then it may help her keep her job as well. The Hewlett Packard CEO, who took the top job last year after a failed run for the California governorship, pointed the finger at her predecessors for the company's recent failings at an investor conference on Wednesday. Whitman told the crowd that HP's excessive turnover in the corner office -- three CEOs in the past three years -- is preventing a quicker turnaround for the troubled tech giant. Whitman also lowered the company's profit projections for fiscal 2013 to $3.40 to $3.60 per share. The Street had already penciled in earnings of $4.17 per share. Shares of HP sank 13% to $15 on her buck-passing. "My belief is that the single biggest challenge facing Hewlett-Packard has been changes in CEOs and executive leadership, which has caused multiple inconsistent strategic choices and frankly some significant executional miscues," Whitman told the crowd. "This is important because as a result it is going to take longer to right this ship than any of us would like." So how does Captain Meg plan to turn the ship around? Well, unlike President Obama and the national economy, she is actually counting on widespread lay-offs to help resuscitate HP's fortunes. The company is already in the process of canning 29,000 employees over the next two years to get costs into line with slowing corporate spending and plummeting PC demand. Hmmm. We wonder what Governor Whitman would have said to HP CEO Whitman about all those lay-offs had she won that political race. Luckily (or perhaps unluckily) HP CEO Whitman will never be forced to answer that question. So when will Whitman -- who last year at her inauguration pronounced "I believe HP matters -- it matters to Silicon Valley, California, the country and the world" -- get things at HP moving again? "Fiscal year 2015 will be the year of acceleration," said Whitman. "Revenues should be growing faster than cost." 2015 huh? At this rate that's still pretty ambitious Meg. Maybe you should ask for four more years.
4. Meg's Marty McFly Moment -- Originally published on March 23, 2012 Honestly, we don't know if Hewlett-Packard's move this week to merge its PC and printer divisions is dumb. Clearly the company needs to slash costs as its revenue -- especially its hardware sales -- continues to shrink. And for all we know right now, this could be Meg Whitman's first real managerial masterstroke in her quest to turn this once-proud tech titan around. For the record, the printing and PC units together made up about half of HP's $30 billion revenue in its fiscal first quarter. Revenue from the printing division was down 13% in 2011 to $25.8 billion from a high of $29.6 billion in fiscal 2008, while sales in the PC division have dropped 6.4% over the same period to $39.6 billion in 2011. That said, while we can't assess how dumb Meg's reorganization plan is at this point in time, we guarantee you this Dumbest fans: It will be dumb at some point. Maybe next month or maybe next year. Or we may even have to wait ten years to revisit Meg's maneuver. But mark our words folks, there will come a moment when an HP restructuring will be Dumbest-worthy, so we might as well get it over with now. How do we know this? Why are we so certain? Well, let's rev the Dumbest DeLorean up to 88 miles per hour and go back to the future, shall we? In September 2001, in what former HP CEO Carly Fiorina calls a "decisive move" to provide "significant cost structure improvements," the company purchases Compaq Computer for $25 billion and merges it with its printer division. HP sales double over the next five years, however, 80% of the company's business remains printer-related and the company's board never forgives Carly for the deal. Fast forward to February 2005: Carly gets canned, complete with a $42 million exit package. Enter new CEO Mark Hurd, who splits the printer and PC businesses into separate divisions in order to lessen the company's dependency on printer-related items. He also lessens the number of employees at the company, slashing headcount at its once-vaunted R&D operation. Fast forward to August 2010: Hurd gets canned, complete with a $34 million exit package. Enter new CEO Leo Apotheker, who tries to get rid of the entire PC business through a sale or spin-off. Everybody thinks Leo is just plain loony. Fast forward a mere 11 months to September 2011: Apotheker gets canned before anybody even learns to pronounce his last name, complete with a $25 million exit package. Enter former eBay chief Meg Whitman as CEO and fast forward to this past Wednesday. "This combination will bring together two businesses where HP has established global leadership," said Whitman in a statement about the new road HP intends to take. Or should we say old road since this is simply a return to the Carly days? Then again, to paraphrase Back to the Future's Doc Brown, where they're going, they don't need roads. Think about it. Who needs roads when you repeatedly throw your entire business up in the air and your CEO out the door?
3. Lucky Leo Cashes Out - - Originally published on Sept. 30, 2011 Honestly, we can't think of a better job in the world than getting fired as CEO of Hewlett-Packard. Can you? Check this out. HP stock was trading at $42 a share on Sept. 30, 2010 when Leo Apotheker replaced the scandal-tarred Mark Hurd as CEO. Fast forward to Sept. 22, 2011 and the shares were barely above $22 when the company formally announced Meg Whitman would be replacing Apotheker in the company's top job. Yep, HP lost nearly half its market value in barely a year under Leo's astute stewardship. So how much is he likely to walk away with for all his success? Over $25 million, according to some sources, after adding up his annual salary, signing bonus, relocation assistance, severance pay and stock grants that vest immediately upon his departure. Lucky Leo is in line to pocket all that dough for wrecking a company and getting ousted. Damn, that sure is good work if you can get it. And because HP is so screwed up, Leo is not even the first guy -- or gal -- to snag a serious payday from HP's board before being sent packing. In fact, that pretty much is the protocol at the printer maker. (Wait! Do they still make printers anymore? Or did they drop that business with the tablets? Oh, who knows anymore? Who cares anymore?) Mark Hurd, who left in a cloud of sex and shame, received a cash severance payment of $12.2 million before jumping to an executive job at Oracle ( ORCL). The total value of his exit package was eventually estimated at $34 million. HP CFO Cathie Lesjak filled in as CEO after Hurd took off, bridging the gap between Hurd and Apotheker. She was granted a $1 million cash bonus and $2.6 million in stock grants for her three months of "exceptional service." And Carly Fiorina, who left as CEO in 2005, was given a $21.4 million cash severance in addition to another $21.1 million in stock grants. All-in HP has spent the better part of $80 million, conservatively speaking, on exit packages for its past four CEOs, including Lesjack's brief stint. Meanwhile, shareholders have seen the value of their holdings decimated. To which we say, congratulations Meg. Good luck with your new gig. Here's hoping you get canned as soon as possible. Seems to guarantee quite a payday.
2. HP's Catastrophic Conference Call -- Originally published on Aug. 26, 2011 We can only believe that Bill Hewlett and Dave Packard would be rolling over in their garage if they had heard HP CEO Leo Apotheker on last week's catastrophic conference call. Shares of the technology giant took their biggest intraday shellacking in three decades last Friday, tumbling 20% after Apotheker issued forecasts that missed analysts' estimates and unveiled strategic changes that had Wall Street analysts scratching their heads. In a bid to boost margins, Apotheker laid out a series of major maneuvers, including jettisoning the company's personal computer business, closing its tablet and smartphone hardware unit and acquiring the enterprise software provider Autonomy Corp. for about $10.3 billion. Yes, Leo wants to follow IBM's ( IBM) lead in going from hardware to software. That much is obvious. How he plans to undo all the expensive acquisitions made by his predecessors? We have no idea. All we can say is that Jerry Seinfeld's fictional, borderline-senile "Uncle Leo" made more sense than his highly compensated corporate namesake running HP. On the call, Apotheker, who joined HP last November from SAP ( SAP) after Mark Hurd was booted for still unexplained sexual harassment shenanigans, said he plans to discontinue the products that run WebOS software, the same line Hurd acquired just last year in the $1.2 billion purchase of Palm Inc. Why the shift away from the WebOS hardware business? Well, Leo refused to talk to analysts about that. As for the software part, however, he did say that they are "looking at all of our strategic options." Thanks for the update, Leo. That's very helpful. It's good to know you are looking at your own business. You needed a press conference for that? Likewise, he said he plans to spin off, sell, or do something inexplicable with HP's Personal Systems Group, or PSG, which is essentially the Compaq Computer business purchased by former CEO Carly Fiorina in 2001 for $25 billion. "So what the board and the management team have been working very diligently over the last period is to really look at all of our options and what the board has decided to do, together with the management team, is to look at all of the strategic options around PSG," said Leo. Um, excuse us for asking Leo. But what on earth does that mean? And why are you saying it to a bunch of analysts who will crucify both you and your stock if you don't give them something of value to plug into their Excel valuation spreadsheets? But while Leo still has not found what he is looking for in HP's old business lines, he certainly sees a savior in Autonomy. So much so that he is paying a mammoth 10 times sales and about 25 times earnings for the outfit. But when asked on the call about Autonomy's organic growth rate, sans the numerous acquisitions it's made over the past few years, Leo would not talk about "any forward-looking growth rates." That's hilarious. Leo is "looking" everywhere for ways to improve HP's fortunes except the one direction HP needs to move: Forward.
1. Blundering Hurd -- Originally published on Aug. 13, 2010 Thank you, Mark Hurd. The summer has been more dull than dumb until you and your friends Jodi and Larry came along. The Hewlett-Packard CEO was sent packing by his board on Friday for falsifying documents in order to conceal an inappropriate connection with Jodi Fisher, a former contractor and B-movie actress, who claimed she was sexually harassed. Hurd, well known at HP for relentlessly cutting costs (and employees) also allegedly used his influence to make sure Fisher was paid for work she never performed. That doesn't seem out of the ordinary, does it? CEO gets involved with a woman other than his wife and winds up paying the consequences. Pretty familiar territory, right? Wrong. This story gets stranger and sillier as it goes along. It turns out that Fisher, who starred in such cinematic classics as Body of Influence 2 and Intimate Obsession, was never intimate with Hurd at all, despite his wining, dining and expense-form forging. Fisher's mouthpiece, celebrity attorney Gloria Allred, released a statement saying she "never had an affair or intimate sexual relationship" with Hurd and that she was "surprised and saddened that Mark Hurd lost his job over this." Excuse us, Jodi. But lost his job over what? We still don't know what you two crazy cats did! And it's most likely we'll never know because you privately settled with Hurd, presumably for big bucks. The same can't be said for HP shareholders, though. They are paying quite publicly for Hurd's misbehavior and not just because the stock lost nearly 10% over the whole inane episode. Hurd's buddies on the board gave him a kingly sendoff package of $12.2 million in severance payments and a host of other goodies, including more time to exercise his 775,000 options and nearly 350,000 shares of restricted stock units. That's not a bad haul for a CEO who set the rules and was then dismissed for breaking them (although a messy exit does seem to fit the pattern for HP brass, considering what happened to former CEO Carly Fiorina and Chairwoman Patricia Dunn). In hard times like these, it's good to have a friend, however. And Hurd has a good one in Oracle CEO Larry Ellison. In an email to The New York Times, Ellison minced no words by saying the HP board made the "worst personnel decision since the idiots on the Apple ( AAPL) board fired Steve Jobs many years ago." Ellison added that the HP board "failed to act in the best interest of HP's employees, shareholders, customers and partners." Frankly, we don't what Larry knows about Hurd's harassment charge. He may know a lot more -- or a lot less -- than we do, but that's never stopped him before from prematurely weighing in on a subject that does not involve him. Truthful or not, HP general counsel Michael Holston would probably disagree with Ellison's account. On a conference call Friday with analysts, Holston said the facts that drove the decision to can Hurd "had to with integrity, had to do with credibility, had to do with honesty." Stop it, Mike. You are embarrassing yourself. This whole embarrassing affair had to do with infidelity, had to do with veracity and had to do with insincerity. And by denying it, and not revealing the truth, you are only adding to the stupidity. -- Written by Gregg Greenberg in New York.