Hewlett-Packard Company
(NYSE:HPQ) has managed to get itself embroiled in a legal matter to add to its
misery as the company makes attempts to recover from a number of setbacks that
have hammered its stock price and increased doubts about its future prospects.
An HP investor, who
possesses 200 shares, has sued the company in an accusation that the management
had hidden problems in two significant acquisitions that have turned into
financial shackles.
The case was filed on
Monday in a federal court in San Francisco. This lawsuit comes after HP shocked
Wall Street the previous week with its own accusations of accounting
shenanigans at a business software manufacturer, Autonomy acquired in lieu of
$10 billion a year back. HP has referred its findings about the suspected fraud
to securities officials in the US and the UK, where Autonomy was based before
the possession.
Other investor lawsuits
are probable since shareholders try to recuperate some of the wealth that has dispersed
since HP replaced Mark Hurd as the CEO in the August of 2010.
The exposures of an alleged
accounting scandal within Autonomy have given rise to already restless
shareholders to chuck HP’s stock. HP has already been losing favor since its
personal computer and printer businesses have been faltering as more people
purchase tablets and smartphones.
To worsen matters even
more, HP had revealed in August that its $13 billion acquisition of Electronic
Data Systems was not working up to the expectations of the management.
The trouble in EDS and
Autonomy has compelled HP to absorb about $17 billion in accounting charges in
the last two quarters, leading to some of the biggest losses in the history of
the company. The Autonomy contract was negotiated while Leo Apotheker was
running HP. The EDS acquisition was closed in the year 2008 when Hurd was in
power.
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