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The HP-Autonomy multi-billion dollar ticklefight has escalated quickly from buck-passing to finger-pointing; in an interview today with the Wall Street Journal, Autonomy founder Mike Lynch gently explains his considered viewpoint that HP can go shove it.
For those just joining us, HP this morning declared a massive $9 billion write-down due to accounting improprieties it had discovered at Autonomy, a company it had purchased for $11.1 billion a year ago. It’s a startling accusation, and implies depths of incompetence and fraud few would have thought even HP capable of. And yet!
But not so fast, says Lynch, who—along with most of Autonomy’s senior management—left HP months ago. This has all the makings of a cover-up:
The only concept I have of it is that it does seem to be coincident with them releasing the worst set of results in their 70 year company history.
I think what has happened here is that they have got themselves in a mess.
They did the acquisition of EDS, they had to write that one down. They had to write Palm down. When Autonomy was acquired it was done by a CEO who wanted to get rid of various divisions of that business and lead with software.
He was ousted in an internal coup d’etat. From that point Autonomy was at odds with the divisions that were in power.
There was a series of mismanagement steps. They lost hundreds of the talented people at Autonomy. They whole management team basically went out of the door. Sadly they are left with the results of having destroyed all that value.
Now they are trying to cover it up with this big write off.
A serious response to a serious charge, but one that does ring at least a little true. Is it really possible that HP could own Autonomy for a whole year before discovering such a blatant malfeasance? And doesn’t HP have every reason to make a scapegoat out of phantom bookkeeping errors?
Well, actually, yes, come to think of it. Sad as it is, the only catch in Lynch’s argument is that HP’s management has been just bungled enough these last several years that a $9 billion accounting hold is exactly the kind of thing they’d miss. In fact, the only real surprise—given the board’s recent history—is that they didn’t find a way to name it CEO.[WSJ]
Image credit: Getty Images/WPA Pool
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I’m bored with Apple Vs Samsung, this looks like it could be more fun
Indeed and certainly less likely to cause inflammatory arguments on Giz, unless there is are secret communities of HP & Autonomy fanboys here we don’t know about.
I reckon I could be the next HP CEO; I’d just do nothing for a year, pay myself a bonus of $1 Billion and they’d still be $8 billion better off….I’d be a frick’in genius!
As long as you realize how fuckin’ dumb printer apps are, I think you’d actually be doing the company a huge favor by being CEO…
Heres our new product a printer with a coffee machine built on it
So you are saying that HP used the same dumbass auditors and advisers that it used when it acquired EDS and Palm?
Im not sure he’s comparing EDS or Palm to the Autonomy case. EDS was overvalued while Palm issue was that the HP had no idea how to create a good reliable phone instead rushed and destroyed all creativity in the Palm business. Also creating printers with Palm os is pretty reatrded
HP are in a world of trouble and this just makes things harder. They are a confused company and don’t seem to have an idea of what they want to be. Personal Systems revenue is down 14%, printing revenues down 5%, enterprise systems down 9% and services down 6%. Ever since Hurd left, they have been rudderless … not looking good.
Still, at lest they make a good condiment for bacon sandwiches.