economic news

1
From They would.P., an error in judgment That
Appears to overpower All

• The dubious title of worst corporate deal ever
  had looked to be held in perpetuity by AOL's
  acquisition of Time Warner
• in 2000, a deal that came to explain the folly of
  the Internet bubble. It ruined shareholder value,
  finished careers and almost capsized the
  surviving AOL Time Warner. Enlarge This Image
• Ryan Anson/Bloomberg News Site , via Getty Images
• Leo Apotheker, ceo of Hewlett Packard, with
  Catherine A. Lesjak, its chief financial officer,
  at a gathering in March 2011. Ms. Lesjak
  powerfully opposed the acquisition of Autonomy.
• Enhance Portfolio
• Hewlett-Packard Company
• Head to your Portfolio
• " The deal was considered so terrible, and this
  kind of object lesson for a generation of deal
  makers and corporate executives, that it seemed
  likely never to be duplicated, rivaled or
  surpassed.
• As yet.
• And it credited significantly more than 5
  billion of the writeoff to what it called a
  "willful attempt on behalf of certain former
  Autonomy workers to inflate the underlying
  monetary metrics of the firm to be able to
  mislead investors and prospective buyers,"
  adding, "These misrepresentations and lack of
  revealing badly affected H.P. management's
  ability to fairly value Autonomy at that time of
  the deal."
• In an unusually aggressive public relations
  counter-attack, Autonomy's founder, Michael
  Lynch, a Cambridgeeducated Ph.D., has denied the
  charges and accused HewlettPackard of mismanaging
  the acquisition. H.P. requested Mr. Lynch to step
  aside last Might after Autonomy's results fell
  far short of expectations.
• But others say the problem of fraud, although it
  might offer a facesaving explanation for at least
  some of H.P.'s enormous write down, shouldn't
  obscure the fact that the deal was wildly
  overpriced from the outset, that at least some
  folks at HewlettPackard recognized that, and that
  H.P.'s chairman, Ray Lane, as well as the board
  that approved the deal ought to be held
  accountable.
• A HewlettPackard spokesman said in a statement
  It goes without saying that they're disappointed
  that a lot of the information they relied upon
  seems to have been controlled or inaccurate."
• Nevertheless, the enormous write-down and the
  unsatisfactory results at Autonomy, combined with
  several other missteps, have led to the
  widespread understanding that H.P., once
  certainly one of the nation's most respected
  companies, has lost its way.