The latest news out of Hewlett-Packard (HPQ) makes it clear that things are only getting worse for the once venerable tech giant. Its stock price tanked to its lowest point in a decade, after the company announced it will take an $8.8 billion writedown on Autonomy, the analytic software company it purchased for more than $10 billion in 2011. The company now says that Autonomy falsified its finances.
The news in other areas of the company wasn’t much better. Revenue fell in every division across the company: personal systems was down 14 percent; printing sales dropped 5 percent; services fell 6 percent; and enterprise servers, storage, and networking tanked 9 percent.
While HP continues to promote its viability as a cloud computing provider, there is little evidence that the marketplace will easily trust its future viability—or management. Chief Executive Meg Whitman, who was on HP’s board when the Autonomy deal was announced, blamed the mistake on her predecessor, Leo Apotheker, and the former strategy exec, Shane Robison. “The CEO at the time and the head of strategy who led this deal are both gone—Leo Apotheker and Shane Robison,” Whitman told analysts on a conference call. At some point, the HP board is going to have to take some responsibility for the latest debacle.
Clearly, Whitman’s move to stand by the PC and printer businesses was a mistake. It is, in essence, a boat anchor that will surely help sink the company. Here is what I wrote about the company in early October.