Things got quite exciting in London at noon on Tuesday. First Kweku Adoboli, the rogue trader formerly employed by UBS, was sentenced to seven years in prison for fraud. Then Hewlett-Packardaccused the former management of Autonomy, the UK software company, of wrongdoing. The moral appeared to be, as a New York journalist wryly tweeted: “Don’t trust the British.”
Hold on a minute, though. This is HP we’re talking about, a company that has a sorry record of overpaying for acquisitions and then writing off most of the value shortly afterwards. If Autonomy inflated its value in its $11bn sale to HP last year, which it firmly denies, it was bought by the world’s biggest deflater.
As Meg Whitman, HP’s latest chief executive, disclosed a writedown of $8.8bn on the Autonomy deal, she made it sound like a unique scandal. But three months ago, she wrote down $8bn on its $13.9bn purchase of Electronic Data Systemsin 2008. Not even that collapse matched Léo Apotheker, her predecessor, who wrote off more than the $1.2bn HP had paid for Palm in 2010.