HP's Autonomy deal highlights pattern of bad ideas
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.
"I don't see how anyone could invest in this company any longer,'' said ISI Group analyst Brian Marshall, who described HP as "an unmitigated train wreck.''
HP's stock plunged $1.59, or nearly 12 percent, to finish Tuesday at $11.71. The shares haven't closed this low since October 2002 when HP was still facing a shareholder backlash over its acquisition of rival Compaq Computer.
That deal has turned out better than the acquisitions HP has made during the past five years under three different CEOs. In that time, HP has spent more than $40 billion to buy dozens of companies. In a reflection of how poorly the biggest of those deals have performed, HP's market value has fallen to just $23 billion. That's about 70 percent less than what HP
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