7 ms·

What about due dilligence? The fact that this can happen boggles my mind.

wheaties 14y ago
Large entities can often mask accounting fraud with the helpnof an accounting firm. Think Enron and Auther Anderson. I'm pretty sure HP is going to sue the begeezus out of a number of complicent players. They should start with the former CEO of Autonomy.
- raverbashing 14y ago
  In fact, HP should start suing the one that had the brilliant idea of acquiring Autonomy: Leo Apotheker
  - skrebbel 14y ago
    If he got bought, yes. Otherwise, since when is making horrible business decisions a crime?
    - raverbashing 14y ago
      It is naive, given the facts, to consider that it was a mere "horrible business decision" especially in face of the values involved
  - chollida1 14y ago
    > In fact, HP should start suing the one that had the brilliant idea of acquiring Autonomy: Leo Apotheker Why? for making a bad business decision? The board approved it. That's why there is a board. The finance department at HP signed off on it. The tech department at HP looked at the tech and signed off on it. Everyone signed off on it, it didn't' work out.
    - raverbashing 14y ago
      Apparently, not that clear-cut http://www.businessinsider.com/meg-whitman-hp-autonomy-blame-2012-11 http://www.businessinsider.com/meg-whitman-hp-autonomy-blame... "Why didn't the HP board question the purchase price in the first place? That's what Benjamin Reitzes, an analyst for Barclays Capital, asked on the call. Whitman's answer: The board wasn't responsible. The two people who were responsible, in her view, are now gone: her predecessor, Léo Apotheker and HP's longtime strategy chief, Shane Robison, who retired in November 2011, shortly after the Autonomy deal went through. "
      - chollida1 14y ago
        I'm not sure that invalidates anything I said. It's true that the buck stops with the CEO. It was after all, his decision to make the deal. My point was what are you going to sue him for? He did the right thing. He made up his mind, ran it past the board for approval, ran it past finance for approval, got an outside auditor to do due diligence. All approved. The deal went through. It turned out to be a stupendously bad business decision. Should twitter be able to sue the developer who made the incredibly bad design decision to use ruby on rails and architect their system as a blog rather than than a message queue? Bad decisions happen, people loose their jobs over them. it's much harder to sue someone when they've done the due diligence and had the decision signed off by many other people.
        raverbashing 14y ago
        Yes, I believe everything you said is valid, it is a bad business decision, unless evidence to something else is found. And in the end, it was not something that was done hidden from other people, if it was a bad decision they should have stood their ground.
- kitsune_ 14y ago
  Back when the deal was announced I was exteremely skeptical. $10.2 billions for a relatively unknown UK software company that focuses on document management? 10 billions?! Their (Autonomy's) past acquisitions looked rather erratic to me. I also did not understand as to why a hardware company like HP would buy a software company in the first place. Then there were all the glassdoor posts discussed here on HN... the whole deal just looked shady even back then. edit: http://news.ycombinator.com/item?id=2902749 http://news.ycombinator.com/item?id=2902749 I just stumbled upon this comment by AlexMuir, it was the most upvoted comment on the HN discussion about HP's acquisition of Autonomy AlexMuir pretty much called it.
  - maxerickson 14y ago
    One of HPs many personalities wants to be IBM (hence the software services acquisition).
- rbanffy 14y ago
  They could start with the board who hired Apotheker.
  - VonGuard 14y ago
    The same board that fired Hurd? The HP board needs to go away. They've been fucking things up for years. It's one of those situations where, after 3 CEO's, the first of which was kicking ass, maybe it's time to consider that the board is the problem, not the CEO.
    - TheCondor 14y ago
      Yeah. The same board that spied on itself and executives to find leaks. They are clearly part of the problem. HP's vaunted culture isn't what they think it is and that's part of the problem too. They are too big for their britches, literally, need to cut some pieces off and get smaller again before they become smaller.
- mongol 14y ago
  Ah, Arthur Andersen. I had to refresh my memory by reading through its Wikipedia page. What a disaster.
chollida1 14y ago
I once asked this when I started at the hedge fund I currently work at. The answer I got was that for a large company, hiding things on the balance sheet is like getting a home inspection and finding out later that the house has some big problems with it. The point being is that inspections find somethings but can never find all issues. What they meant was that if you dig deep enough you can always find out the problems, but when your going through the aquisition, you often don't have the proper access to the records you want, or the time to do the entire audit. HP has owned autonomy for over a year and just found out this quarter. There is no way they would have had such access to autonomy's books during the due diligence phase nor is there anyway that autonomy would have let them take over a year to do their due diligence
- cperciva 14y ago
  I understand that due diligence is hard and there's always going to be things which get missed... but I have trouble understanding how it's possible to miss 8.8 billion dollars.
  - chollida1 14y ago
    > but I have trouble understanding how it's possible to miss 8.8 billion dollars. I think we all are this morning. Unfortunetly the chatter we are hearing is that this type of accounting cover up, if true, would require help from their auditor. Which means we may be down another accounting firm by the time this is over.
  - jfb 14y ago
    It's also not in anyone's immediate short-term interest to find a reason to scotch an 1.0x10^10$ deal, and whatever we'll kick this stinker of a deal down the road for the next CEO/CFO/&c.
  - benth 14y ago
    I agree. When I heard HP was buying Autonomy for that much, I immediately thought of MS's purchase of aQuantive. And now both end up with huge write-downs.
- 14y ago

Large entities can often mask accounting fraud with the helpnof an accounting firm. Think Enron and Auther Anderson. I'm pretty sure HP is going to sue the begeezus out of a number of complicent players. They should start with the former CEO of Autonomy.

raverbashing 14y ago
In fact, HP should start suing the one that had the brilliant idea of acquiring Autonomy: Leo Apotheker
- skrebbel 14y ago
  If he got bought, yes. Otherwise, since when is making horrible business decisions a crime?
  - raverbashing 14y ago
    It is naive, given the facts, to consider that it was a mere "horrible business decision" especially in face of the values involved
- chollida1 14y ago
  > In fact, HP should start suing the one that had the brilliant idea of acquiring Autonomy: Leo Apotheker Why? for making a bad business decision? The board approved it. That's why there is a board. The finance department at HP signed off on it. The tech department at HP looked at the tech and signed off on it. Everyone signed off on it, it didn't' work out.
  - raverbashing 14y ago
    Apparently, not that clear-cut http://www.businessinsider.com/meg-whitman-hp-autonomy-blame-2012-11 http://www.businessinsider.com/meg-whitman-hp-autonomy-blame... "Why didn't the HP board question the purchase price in the first place? That's what Benjamin Reitzes, an analyst for Barclays Capital, asked on the call. Whitman's answer: The board wasn't responsible. The two people who were responsible, in her view, are now gone: her predecessor, Léo Apotheker and HP's longtime strategy chief, Shane Robison, who retired in November 2011, shortly after the Autonomy deal went through. "
    - chollida1 14y ago
      I'm not sure that invalidates anything I said. It's true that the buck stops with the CEO. It was after all, his decision to make the deal. My point was what are you going to sue him for? He did the right thing. He made up his mind, ran it past the board for approval, ran it past finance for approval, got an outside auditor to do due diligence. All approved. The deal went through. It turned out to be a stupendously bad business decision. Should twitter be able to sue the developer who made the incredibly bad design decision to use ruby on rails and architect their system as a blog rather than than a message queue? Bad decisions happen, people loose their jobs over them. it's much harder to sue someone when they've done the due diligence and had the decision signed off by many other people.
      - raverbashing 14y ago
        Yes, I believe everything you said is valid, it is a bad business decision, unless evidence to something else is found. And in the end, it was not something that was done hidden from other people, if it was a bad decision they should have stood their ground.
kitsune_ 14y ago
Back when the deal was announced I was exteremely skeptical. $10.2 billions for a relatively unknown UK software company that focuses on document management? 10 billions?! Their (Autonomy's) past acquisitions looked rather erratic to me. I also did not understand as to why a hardware company like HP would buy a software company in the first place. Then there were all the glassdoor posts discussed here on HN... the whole deal just looked shady even back then. edit: http://news.ycombinator.com/item?id=2902749 http://news.ycombinator.com/item?id=2902749 I just stumbled upon this comment by AlexMuir, it was the most upvoted comment on the HN discussion about HP's acquisition of Autonomy AlexMuir pretty much called it.
- maxerickson 14y ago
  One of HPs many personalities wants to be IBM (hence the software services acquisition).
rbanffy 14y ago
They could start with the board who hired Apotheker.
- VonGuard 14y ago
  The same board that fired Hurd? The HP board needs to go away. They've been fucking things up for years. It's one of those situations where, after 3 CEO's, the first of which was kicking ass, maybe it's time to consider that the board is the problem, not the CEO.
  - TheCondor 14y ago
    Yeah. The same board that spied on itself and executives to find leaks. They are clearly part of the problem. HP's vaunted culture isn't what they think it is and that's part of the problem too. They are too big for their britches, literally, need to cut some pieces off and get smaller again before they become smaller.
mongol 14y ago
Ah, Arthur Andersen. I had to refresh my memory by reading through its Wikipedia page. What a disaster.

chollida1 14y ago

I once asked this when I started at the hedge fund I currently work at. The answer I got was that for a large company, hiding things on the balance sheet is like getting a home inspection and finding out later that the house has some big problems with it. The point being is that inspections find somethings but can never find all issues. What they meant was that if you dig deep enough you can always find out the problems, but when your going through the aquisition, you often don't have the proper access to the records you want, or the time to do the entire audit. HP has owned autonomy for over a year and just found out this quarter. There is no way they would have had such access to autonomy's books during the due diligence phase nor is there anyway that autonomy would have let them take over a year to do their due diligence

cperciva 14y ago
I understand that due diligence is hard and there's always going to be things which get missed... but I have trouble understanding how it's possible to miss 8.8 billion dollars.
- chollida1 14y ago
  > but I have trouble understanding how it's possible to miss 8.8 billion dollars. I think we all are this morning. Unfortunetly the chatter we are hearing is that this type of accounting cover up, if true, would require help from their auditor. Which means we may be down another accounting firm by the time this is over.
- jfb 14y ago
  It's also not in anyone's immediate short-term interest to find a reason to scotch an 1.0x10^10$ deal, and whatever we'll kick this stinker of a deal down the road for the next CEO/CFO/&c.
- benth 14y ago
  I agree. When I heard HP was buying Autonomy for that much, I immediately thought of MS's purchase of aQuantive. And now both end up with huge write-downs.
14y ago