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"Hewlett-Packard’s acquisition last year of the British software maker Autonomy for $11.1 billion “may be worse than Time Warner,” Toni Sacconaghi, the respecte
by YokoZar 14y ago
"Hewlett-Packard’s acquisition last year of the British software maker Autonomy for $11.1 billion “may be worse than Time Warner,” Toni Sacconaghi, the respected technology analyst at Sanford C. Bernstein, told me, a view that was echoed this week by several H.P. analysts, rivals and disgruntled investors.
Last week, H.P. stunned investors still reeling from more than a year of management upheavals, corporate blunders and disappointing earnings when it said it was writing down $8.8 billion of its acquisition of Autonomy, in effect admitting that it had overpaid by an astonishing 79 percent."
Doesn't that mean they overpaid by 482 percent? It is true that the acquisition lost 79 percent of its value, but the editor seems to have gotten the math wrong here.
- alexandros 14y agoWhat the article should say to keep the 79% number in place is that '79% of the price was overpayment'. What you are saying is that 'they paid 482% of what they should have'. If they want to keep the structure of what they have written, I think ghshephard's formulation is right. They overpaid by 382%. Aren't percentages fun?
- bartl 14y agoIt depends on how you calculate the percentages. "Percents" are only useful as a tool for small numbers, say less than 10%: 90% is not far from 1/110%, so no matter how you calculate 10% loss or gain, you'll get numbers that don't stray too far apart. Probably the author means that 79% of the money they paid (8.8/11.1) was thrown away, thus it was only worth 21% of what they paid. Stating they paid almost five times too much is much clearer.
- ghshephard 14y agoAlmost correct - actually 382 Percent overpayment. 0% overpayment would have been 2.3 Billion. ($11.1 - $8.8). Did you send in a correction to the Editor?
- deleted 14y ago[deleted]