HP's Autonomy deal highlights pattern of bad ideas
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"When I talk to investors, that is what they are concerned about: the credibility of the board,'' said Sterne Agee analyst Shaw Wu. "There already has been a lot of turmoil at this company, but maybe they still need more change.'' Wu said he isn't even sure Whitman's job as CEO is safe because of her presence on the board when the Autonomy deal was approved.
In a research note, Topeka Capital Markets analyst Brian White called for a new purge of HP's board.
Whitman said she regrets voting in favor of the Autonomy acquisition while insisting HP did its due diligence. That was an assertion echoed by Apotheker in a prepared statement.
HP Chairman Ray Lane, who joined the board when Apotheker was hired in 2010, didn't respond to an interview request Tuesday.
Mark Williams, a finance professor at Boston University and a former bank examiner for the Federal Reserve, called HP's accusations against Autonomy ``due diligence deflection''.
"Just to say `we paid too much because of fraud' doesn't negate the fact of inadequate due diligence,'' said Williams. "Some responsibility needs to come back to HP.''
At least one of HP's board members, McKesson Corp. CEO John Hammergren, has experience the aftermath of an accounting scandal. McKesson named Hammergren as its CEO after revealing it had been conned into buying software maker HBO & Co. for $12 billion in 1999. The accounting fraud wiped out half of McKesson's market value. The San Francisco company has since bounced back under Hammergren, but the comeback took years to pull off.
Investors are losing hope that HP will rebound because the company has made so many questionable decisions in the five years since Apple Inc.'s release of the first iPhone changed the way people use technology. The upheaval has reduced demand for HP's PCs and printers.
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