Hewlett Packard‘s CEO Meg Whitman has her work cut out for her. It’s not just the losses due to alleged fraud committed by the management at Autonomy prior to its acquisition by HP. HP, a $25.05 Billion company, is writing off losses of $18.3 Billion to $18.5 Billion in calendar year 2012. The losses equate to 73.0% to 73.8% of the company’s value.
The adult in the cartoon is not Carly Fiorina, Mark Hurd, Leo Apotheker formerly of HP, or John Lynch, formerly of HP & Autonomy. While the three ex-CEOs were paid a total of $80 Million after being fired (here), they did NOT create shareholder value. Under their guidance, the company lost 77.92% of its peak value; the shareholders lost $81.54 Billion between Dec. 31, 1999 (here) and the close of trading, Nov. 23, 2012.
While Autonomy’s $10 Billion valuation may have been John Lynch’s fraud – the FBI and it’s counterparts in London are investigating (here) – HP’s acquisition of Autonomy was Leo Apotheker’s error, and has become Meg Whitman’s problem. I’m sure that if Whitman is unsuccessful, or the Board fires her before she can be successful, she will be well taken care of, as were Fiorina, Hurd, and Apotheker. Meanwhile Bill Hewlett & Dave Packard – who created value for the shareholders and other stakeholders – must be turning over in their graves.