HP CEO's Bad Investment: A Cautionary Tale

The Decision

In 2011, HP CEO Leo Apotheker made a disastrous decision to acquire Autonomy Corporation for $11.1 billion. Autonomy was a software company that specialized in data analysis and management. Apotheker believed that the acquisition would help HP compete with IBM and Oracle in the enterprise software market.

The Problems

However, the acquisition quickly turned sour. Autonomy's financial performance was not as strong as HP had been led to believe, and the company's technology was not as compatible with HP's as Apotheker had hoped. As a result, HP was forced to write down the value of the acquisition by $8.8 billion, resulting in a massive loss for the company and its shareholders.

The Fallout

The Autonomy acquisition was a major blow to HP's reputation and financial stability. Apotheker was fired in 2012, and HP's stock price plummeted. The company has not fully recovered from the acquisition, and it continues to face challenges in the enterprise software market.

Lessons Learned

The HP-Autonomy acquisition is a cautionary tale for businesses of all sizes. It is important to do your due diligence before making any major acquisition, and to be aware of the risks involved. It is also important to have a clear strategy for how you will integrate the acquired company into your own business. HP failed to do both of these things, and it paid a heavy price.