HP & Autonomy: Another Bubble, Another Bust

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Wale Bakare
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Re: This is All Because
Wale Bakare   11/27/2012 9:42:26 AM
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What's essence of having tools that cannot  perform your required tasks for you? And whose onus the problem would be eventually, the contractor or algorithm meant for the valuation?

prabhakar_deosthali
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Re:
prabhakar_deosthali   11/27/2012 5:58:18 AM
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Whether it is bank fruad, overvaluation of a company on sale or any such financial scandal, it looks like the accounting people are joining hands under the table and duping the investors.

Those sitting on the company boards need to be more vigilant to avoid playing in the hands of these accounting manipulators

TaimoorZ
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Re: Alchemy to software bubble?
TaimoorZ   11/27/2012 5:17:24 AM
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@Nicole: I won't blame HP entirely on this one. The evaluation for Autonomy had come from a reliable source and could be trusted on. It would have been better if they had also set up an internal team to perform the analysis before acquisition.

TaimoorZ
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Re: This is All Because
TaimoorZ   11/27/2012 5:13:32 AM
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I think HP hasn't been known for acquiring companies and this may be one of the few companies they have ventured into acquiring. It's interesting to see HP take this path for growth. Although this decision might not have proved to be a smart one as of yet, this path may have a lot of potential for HP in future.

The Source
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Re: This is All Because
The Source   11/27/2012 12:41:43 AM
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Dear Rich,

I'm sure that you will be interested in the findings of the US Securities and Exchange Commission's Enforcement Division and the UK's Serious Fraud Office for civil and criminal investigation - two agencies that are now investigating the Autonomy case. 

With regard to your point that there is a reliance on "third-world companies like KPMG and Deloitte" to audit companies' financial statements, let me point out that Autonomy was a UK software company, KPMG is headquartered in Europe and Deloitte's headquarters are in the US. These are not companies that can be classified as "third-world companies" as you have described them.

Thanks for reading my article, and I appreciate your comments.

Nicole

 

The Source
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Re: Alchemy to software bubble?
The Source   11/27/2012 12:17:34 AM
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_hm

There have been a number of bubbles and busts in recent times whether it's the tech bubble or the housing bubble and since then we've seen analysts call out companies like Groupon and Facebook for their overvalued stock prices at the time of their IPOs. Now we have the case of Autonomy.  This problem won't go away anytime soon.

The question in the Autonomy case is how did Autonomy's officials misrepresent its financial results and not get caught by reputable accounting firms that were analyzing the numbers? Why was HP convinced that Autonomy was worth billions of dollars when others in the industry had their doubts?  Why did HP not notice this discrepancy? This mistake in not in the millions of dollars, this is an $8.8 billion mistake. This incident tells us a lot about HP's management team and its board. They don't have a grip on what it's going to take to get HP out of its problems anytime soon.  

Thanks for your comments.

Nicole  


_hm
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Alchemy to software bubble?
_hm   11/26/2012 9:12:21 PM
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Is tihs forerunner to software bubble? When you try to analyze many of charges and prices of software organizations, this looks impending trend. Another was facebook.

 

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