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SkinnyPupp · 08-21-2011, 01:24 AM

Interesting how this came to be

first, HP buys Palm for $1.8bn (actually, $1.2bn and then some directly-related expenses bring it up to $1.8bn)
then, HP makes approx $5.1bn in 'support' acquisitions (music services, video libraries, cloud services, etc.)
then, HP spends $0.6bn with TV and print advertising for the Veer and TouchPad
then, HP discovers that it's going to take another 'several hundred million dollars' {source: earnings call} to achieve tenable position in tablet market. Hmm, spend another $0.7bn to get value out of $7.5bn investment? Obvious solution: pull plug, burn bridges, walk away.
at the same time, HP's CEO decides he wants HP to be more like SAP. Oh, did I mention that HP's current CEO is the former CEO of SAP? And that he was turfed from SAP for diminishing shareholder value?
so, HP announces that it's going to buy a software company that sorts e-mails for $10.4bn - approx 35x earnings. Analysts estimate value of company at about $4bn
the market responds by selling HP stock like it was bubonic plague. Drops 22.6% and still falling...
Estimated value wiped out in 48 hours on stock alone: $13.9bn
Estimated value lost in Palm acquisition (so far): $7.5bn
Estimated value pissed away on 'Autonomy' purchase: $10.4bn
Total amount of money wasted: $31.8bn
Likely cost of inevitable shareholder lawsuits: unknown
Value of lost reputation, lost opportunities, etc.... Priceless

08-21-2011, 01:24 AM	#272
SkinnyPupp Hacked RS to become a mod Join Date: Feb 2002 Location: Sunny Hong Kong Posts: 55,110 Thanked 25,916 Times in 9,108 Posts Failed 1,574 Times in 720 Posts Member's Picture Albums	Interesting how this came to be first, HP buys Palm for $1.8bn (actually, $1.2bn and then some directly-related expenses bring it up to $1.8bn) then, HP makes approx $5.1bn in 'support' acquisitions (music services, video libraries, cloud services, etc.) then, HP spends $0.6bn with TV and print advertising for the Veer and TouchPad then, HP discovers that it's going to take another 'several hundred million dollars' {source: earnings call} to achieve tenable position in tablet market. Hmm, spend another $0.7bn to get value out of $7.5bn investment? Obvious solution: pull plug, burn bridges, walk away. at the same time, HP's CEO decides he wants HP to be more like SAP. Oh, did I mention that HP's current CEO is the former CEO of SAP? And that he was turfed from SAP for diminishing shareholder value? so, HP announces that it's going to buy a software company that sorts e-mails for $10.4bn - approx 35x earnings. Analysts estimate value of company at about $4bn the market responds by selling HP stock like it was bubonic plague. Drops 22.6% and still falling... Estimated value wiped out in 48 hours on stock alone: $13.9bn Estimated value lost in Palm acquisition (so far): $7.5bn Estimated value pissed away on 'Autonomy' purchase: $10.4bn Total amount of money wasted: $31.8bn Likely cost of inevitable shareholder lawsuits: unknown Value of lost reputation, lost opportunities, etc.... Priceless