Bloomberg the Company & Products

Bloomberg Anywhere Login

Bloomberg

Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.

Company

Financial Products

Enterprise Products

Media

Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000

Communications

Industry Products

Media Services

Follow Us

Kreher Says HP’s Autonomy Claims Cover for Bad Purchase

Don't Miss Out —
Follow us on:

Nov. 26 (Bloomberg) -- Bill Kreher, an analyst at Edward Jones, said Hewlett-Packard Co. is accusing software maker Autonomy Corp. of falsified finances to deflect from a badly executed acquisition.

Hewlett-Packard, based in Palo Alto, California, last week accused Autonomy of financial irregularities and recorded a related $8.8 billion writedown. More than $5 billion of the impairment charge was the result of accounting practices, Hewlett-Packard said on Nov. 20. Autonomy has denied the allegations. Michael Thacker, a spokesman for Hewlett-Packard, said in an e-mailed statement today that Autonomy engaged in “a willful effort to mislead investors and potential buyers.”

Former Chief Executive Officer Leo Apotheker, 59, agreed to buy Autonomy for $10.3 billion last year to diversify away from hardware and add software that searches a broad range of data, including e-mails, music, videos and posts on social networks such as Facebook Inc. Apotheker left in 2011 after less than a year on the job following repeated strategy shifts and forecast cuts.

Autonomy was supposed to be “the crown jewel of the software turnaround and the software transition” at Hewlett-Packard, Kreher said in a radio interview with Tom Keene on “Bloomberg Surveillance” in New York today. “They really have to rethink their plans here. Certainly this is a setback for a company that is trying to restore its credibility as an enterprise leader.”

The writedown is another blow for Hewlett-Packard, which is already suffering from management turmoil and slowdowns in its personal-computer, printer and technology-services businesses. It comes three months after the company announced an $8 billion writedown related to an earlier acquisition.

To contact the reporter on this story: Ryan Faughnder in New York at rfaughnder@bloomberg.net

To contact the editor responsible for this story: Tom Giles at tgiles5@bloomberg.net

Please upgrade your Browser

Your browser is out-of-date. Please download one of these excellent browsers:

Chrome, Firefox, Safari, Opera or Internet Explorer.