PALO ALTO, Calif. — The Hewlett-Packard Company disclosed today that it may be too stupid to survive. In announcing its fourth quarter and full year results for 2012, the hardware company said it would write off $8.8 billion of the $10.5 billion it spent to acquire a software company just last year.
Beginning in 2001, under then-chief executive Carleton S. Fiorina, HP has spent $66.25 billion on acquisitions – and that’s just counting the deals valued at $1 billion more.
HP’s total market capitalization today: $23 billion. By any measure, that’s a stunning destruction of shareholder value.
HP said the $8.8 billion write-down today followed its discovery that the software company it bought just last year was worth only a fraction as much as HP thought it was. (HP accused the company, Autonomy, of a multibillion-dollar accounting fraud. Autonomy’s former chief executive, Mike Lyons denied HP’s allegations.)
If HP’s assertions about Autonomy are true, the question is: How did an $8.8 billion accounting fraud get past HP’s accountants and lawyers? How did it get past the HP board of directors?
And as long as I’m asking questions, here’s another: What the heck is Autonomy, anyway? Here’s what it says on the company web site:
Autonomy, an HP company, is a market-leading software company that helps organizations all over the world understand the meaning in information. A pioneer in its industry, Autonomy’s unique meaning-based technology is able to make sense of and process unstructured, ‘human information,’ and draw real business value from that meaning.
Too bad HP was not able to use that software to draw real value from its string of disastrous acquisitions.