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> Artificially inflated Can someone please explain why is this company any different than any US company? In my eyes they are all artificially inflated. I love

> Artificially inflated Can someone please explain why is this company any different than any US company? In my eyes they are all artificially inflated. I love Tesla for instance but please P/E ratio of 654.03 isn't that the same thing? (it is genuine question)

hogFeast 5y ago
Because they were fabricating sales numbers, channel stuffing, misreporting expenses...Autonomy was a fraud, the numbers weren't real, the CFO is already doing time.
- NiceWayToDoIT 5y ago
  But how people from HP they have not noticed fraud during due diligence process?
  - bmsleight_ 5y ago
    HP Paid 70& premium on the share price. Bit of a hint HP paid too much.
  - rwmj 5y ago
    HP can be both incompetent and at the same time have missed the fraud that it is alleged Autonomy were trying to hide.
SirSourdough 5y ago
Tesla’s P/E is a function of stockholders inflating the stock price. The allegation here (by my limited understanding) is that Autonomy lied about how much revenue the business was actually generating. It’s not illegal to have your stock price inflated because of demand for the stock, but it is illegal to lie in your financial statements.
- NiceWayToDoIT 5y ago
  OK but how is that possible? Before you sell a company there is a long due diligence process, where all papers and everything else is given to inspection, and I can imagine team of 10 people lawyers accountants and experts going to every, note, paper and even paperclip. Also isn't rule of market capitalism, if I am the seller I can put any price in the product/service I own, if you do not like my price you do not have to buy?!
  - SirSourdough 5y ago
    The short answer is that HP didn’t identify the fraud when they did their due diligence. Just because you look at a businesses financials doesn’t mean you’ll identify fraud they are trying to hide. As far as the seller determining the price, that’s true but the price they set is set on the basis that they aren’t lying about what they are selling you. If someone sells you a pure gold box that turns out to just be aluminum wrapped in gold foil, that’s fraud even if you agreed to pay for the pure gold box. The seller did not provide the thing you agreed to pay for. It’s the same in this case, the seller allegedly lied about what they were selling to get HP to agree to an inflated price.
    - NiceWayToDoIT 5y ago
      That scenario looks fishy to me, even when you buying second hand car you do bit of exploration and for buying something with price tag of £11,000,000,000 well you dig a bit deeper, and due diligence is not just going to your financial statements and what is usually accessibly in UK publicly. During that process you dig trough everything, bank statements, expenses, salaries, earnings, revenue streams ... everything. Personally, I think it is impossible HP has not seen something like that, or they have sent complete idiots to do due diligence.
      - _se 5y ago
        I don't think you understand the complexity of this type of finance or the sophistication that's possible while committing fraud. These things are not necessarily simple to detect.
downWidOutaFite 5y ago
This case is about inflated accounting numbers, not the stock market's speculation.
himinlomax 5y ago
> I love Tesla for instance but please P/E ratio of 654.03 isn't that the same thing? (it is genuine question) You can't fault Tesla for idiots buying the overpriced stock, as long as they don't misrepresent their results.

hogFeast 5y ago

Because they were fabricating sales numbers, channel stuffing, misreporting expenses...Autonomy was a fraud, the numbers weren't real, the CFO is already doing time.

NiceWayToDoIT 5y ago
But how people from HP they have not noticed fraud during due diligence process?
- bmsleight_ 5y ago
  HP Paid 70& premium on the share price. Bit of a hint HP paid too much.
- rwmj 5y ago
  HP can be both incompetent and at the same time have missed the fraud that it is alleged Autonomy were trying to hide.

SirSourdough 5y ago

Tesla’s P/E is a function of stockholders inflating the stock price. The allegation here (by my limited understanding) is that Autonomy lied about how much revenue the business was actually generating. It’s not illegal to have your stock price inflated because of demand for the stock, but it is illegal to lie in your financial statements.

NiceWayToDoIT 5y ago
OK but how is that possible? Before you sell a company there is a long due diligence process, where all papers and everything else is given to inspection, and I can imagine team of 10 people lawyers accountants and experts going to every, note, paper and even paperclip. Also isn't rule of market capitalism, if I am the seller I can put any price in the product/service I own, if you do not like my price you do not have to buy?!
- SirSourdough 5y ago
  The short answer is that HP didn’t identify the fraud when they did their due diligence. Just because you look at a businesses financials doesn’t mean you’ll identify fraud they are trying to hide. As far as the seller determining the price, that’s true but the price they set is set on the basis that they aren’t lying about what they are selling you. If someone sells you a pure gold box that turns out to just be aluminum wrapped in gold foil, that’s fraud even if you agreed to pay for the pure gold box. The seller did not provide the thing you agreed to pay for. It’s the same in this case, the seller allegedly lied about what they were selling to get HP to agree to an inflated price.
  - NiceWayToDoIT 5y ago
    That scenario looks fishy to me, even when you buying second hand car you do bit of exploration and for buying something with price tag of £11,000,000,000 well you dig a bit deeper, and due diligence is not just going to your financial statements and what is usually accessibly in UK publicly. During that process you dig trough everything, bank statements, expenses, salaries, earnings, revenue streams ... everything. Personally, I think it is impossible HP has not seen something like that, or they have sent complete idiots to do due diligence.
    - _se 5y ago
      I don't think you understand the complexity of this type of finance or the sophistication that's possible while committing fraud. These things are not necessarily simple to detect.

downWidOutaFite 5y ago

This case is about inflated accounting numbers, not the stock market's speculation.

himinlomax 5y ago

> I love Tesla for instance but please P/E ratio of 654.03 isn't that the same thing? (it is genuine question) You can't fault Tesla for idiots buying the overpriced stock, as long as they don't misrepresent their results.