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.