Jim Chanos Nailed The HP Debacle In One Slide

Hewlett Packard stock is getting killed this morning after the company reported a one-time $8.8 billion charge for to alleged accounting inconsistencies related to the acquisition of its Autonomy software unit.

We pulled out the key part of HP’s earning report this morning:

The charge relates to serious accounting improprieties, disclosure failures and outright misrepresentations at Autonomy that oc cured prior to HP’s acquisition of Autonomy and the trading value of HP stock during the period preceding the recording of the charge.

In short, this is a due diligence problem.

disclosure failures and outright misrepresentations at Autonomy that occurred prior to HP’s acquisition

Read more: http://www.businessinsider.com.au/hp-falling-after-weak-outlook-2012-11#ixzz2CltOGCRT and the trading value of HP stock during the period preceding the recording of the charg

Read more: http://www.businessinsider.com.au/hp-falling-after-weak-outlook-2012-11#ixzz2CltnAzd disclosure failures and outright misrepresentations at Autonomy that occurred prior to HP’s acquisition of Autonomy and the trading value of HP stock during the period preceding the recording of the charge.

Read more: http://www.businessinsider.com.au/hp-falling-after-weak-outlook-2012-11#ixzz2CltFUFY disclosure failures and outright misrepresentations at Autonomy that occurred prior to HP’s acquisition of Autonomy and the trading value of HP stock during the period preceding the recording of the charge. In the third quarter of fiscal 2012, HP recorded an impairment charge for the goodwill associated with its Services segment following an impairment review driven by, among other things, the trading value of HP stock during the period preceding the recording of the charge, market conditions and business trends within that segment.

Read more: http://www.businessinsider.com.au/hp-falling-after-weak-outlook-2012-11#ixzz2Clt7V9Sy The charge relates to serious accounting improprieties, disclosure failures and outright misrepresentations at Autonomy that occurred prior to HP’s acquisition of Autonomy and the trading value of HP stock during the period preceding the recording of the charge. In the third quarter of fiscal 2012, HP recorded an impairment charge for the goodwill associated with its Services segment following an impairment review driven by, among other things, the trading value of HP stock during the period preceding the recording of the charge, market conditions and business trends within that segment.

Read more: http://www.businessinsider.com.au/hp-falling-after-weak-outlook-2012-11#ixzz2ClscJ7LD The charge relates to serious accounting improprieties, disclosure failures and outright misrepresentations at Autonomy that occurred prior to HP’s acquisition of Autonomy and the trading value of HP stock during the period preceding the recording of the charge. In the third quarter of fiscal 2012, HP recorded an impairment charge for the goodwill associated with its Services segment following an impairment review driven by, among other things, the trading value of HP stock during the period preceding the recording of the charge, market conditions and business trends within that segment.

Read more: http://www.businessinsider.com.au/hp-falling-after-weak-outlook-2012-11#ixzz2ClscJ7LD The charge relates to serious accounting improprieties, disclosure failures and outright misrepresentations at Autonomy that occurred prior to HP’s acquisition of Autonomy and the trading value of HP stock during the period preceding the recording of the charge. In the third quarter of fiscal 2012, HP recorded an impairment charge for the goodwill associated with its Services segment following an impairment review driven by, among other things, the trading value of HP stock during the period preceding the recording of the charge, market conditions and business trends within that segment.

Read more: http://www.businessinsider.com.au/hp-falling-after-weak-outlook-2012-11#ixzz2ClscJ7LD

Read more: http://www.businessinsider.com.au/hp-falling-after-weak-outlook-2012-11#ixzz2ClsB5B3t

Read more: http://www.businessinsider.com.au/hp-falling-after-weak-outlook-2012-11#ixzz2ClsB5B3t

Read more: http://www.businessinsider.com.au/hp-falling-after-weak-outlook-2012-11#ixzz2ClsB5B3t Here’s the key line from the release on the charge:

The charge relates to serious accounting improprieties, disclosure failures and outright misrepresentations at Autonomy that occurred prior to HP’s acquisition of Autonomy and the trading value of HP stock during the period preceding the recording of the charge. In the third quarter of fiscal 2012, HP recorded an impairment charge for the goodwill associated with its Services segment following an impairment review driven by, among other things, the trading value of HP stock during the period preceding the recording of the charge, market conditions and business trends within that segment.

Read more: http://www.businessinsider.com.au/hp-falling-after-weak-outlook-2012-11#ixzz2ClsB5B3t Here’s the key line from the release on the charge:

The charge relates to serious accounting improprieties, disclosure failures and outright misrepresentations at Autonomy that occurred prior to HP’s acquisition of Autonomy and the trading value of HP stock during the period preceding the recording of the charge. In the third quarter of fiscal 2012, HP recorded an impairment charge for the goodwill associated with its Services segment following an impairment review driven by, among other things, the trading value of HP stock during the period preceding the recording of the charge, market conditions and business trends within that segment.

Read more: http://www.businessinsider.com.au/hp-falling-after-weak-outlook-2012-11#ixzz2ClsB5B3tNow while some people may have been shocked by this news, short-seller Jim Chanos was definitely not. He dug into HP and found the company wanting.

Last July, in fact, he said that HP’s acquisitions would ultimately take the company down and included it in a presentation he did about value traps.

In fact, he called HP the “ultimate value trap.”

Here’s the slide where he breaks down his reasoning behind that:

jim chanos HP slide

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