Palo Alto-based HP said Tuesday, Nov. 20, that "accounting improprieties, misrepresentations and disclosure failures" caused it to massively overpay for the British software company Autonomy Inc. last year, which it bought for nearly $11 billion.
The company announced an $8.8 billion impairment charge in the fourth quarter, stating that the majority of the charge, more than $5 billion, was related to accounting improprieties that resulted in Autonomy being "extremely overvalued" at the time of its acquisition.
HP said Autonomy intentionally misstated its financial performance, including its revenue, core growth rate and gross margins, and the misrepresentation of its business mix.
"These efforts appear to have been a willful effort to mislead investors and potential buyers, and severely impacted HP management's ability to fairly value Autonomy at the time of the deal," the company stated in a press release.
The bad news caused HP's stock value to fall to $11.52, its lowest point since 2002.
On the same day, the company reported that its revenue was down 5 percent from last year, falling from $127.2 billion to $120.4 billion. The company's fourth-quarter revenue was $30 billion, down 7 percent from last year's $32.1 billion fourth quarter.