HP: Caveat Venditor Becomes the Company Slogan
March 31, 2015
[I was going to post this on April Fool’s Day. But I thought that some of my very small audience would think I was posting a joke. This is no joke, I fear.]
I am not sure my high school Latin is working, but I think I am close. You know the phrase, Caveat emptor. My view is that Hewlett Packard’s new slogan is, “Seller beware” or caveat venditor in my version of the dead language.
Navigate to “HP Sues Autonomy Co-Founder Lynch in U.K. for $5.1 Billion.” The write up reports:
Hewlett-Packard Co. escalated its more than two-year-old battle with Michael Lynch, suing the Autonomy Corp. co-founder, as well as a former chief financial officer, for $5.1 billion. Hewlett-Packard has maintained that before it agreed to buy the Cambridge, England-based software company for $10 billion in 2011, Lynch and other managers gave an overly optimistic representation of its financial health.
There you go. Let me get this straight. HP decided to buy something. That something triggered much work by HP executives and its consultants. The something became Autonomy. More analyses and conversations ensued.
HP believes that the sellers (Dr. Mike Lynch and his senior managers) did the Norman Vincent Peale thing to sway the $100 billion corporation. You remember. The Power of Positive Thinking. I assume Dr. Lynch and his team did the normal sales pitch complete with diagrams, buzzwords, and lots of upbeat comments about the market opportunity, the IDOL and DRE technology, and the future for smart software. Most of the pitches I have heard in my 50 year business career are more marketing than verifiable facts. Buyers want to buy. Sellers want to sell. Sellers usually have a tough time forcing a buyer to buy unless the situation takes place in a Netflix entertainment experience.
A happy quack to http://www.owned.com/search/advertising-fail/
The article points out:
The U.K.’s Serious Fraud Office in January dropped its probe into the takeover after finding “insufficient evidence for a realistic prospect of conviction,” the agency said at the time. The U.S. Department of Justice is still investigating, and the SFO said it gave its files to the U.S. authorities. The U.K. accounting regulator, the Financial Reporting Council, is still looking into the matter. The fight has been played out in the open on both sides of the Atlantic, with Lynch posting comments and documents on his blog and Hewlett-Packard aligning with shareholders to pursue Lynch and Hussain in court.
Okay. The SFO seems to okay with the deal. FRC is still analyzing.
The winner is going to be the law firms working on this matter. From my point of view, HP bought Autonomy. Dr. Lynch sold Autonomy. As far as I know, Dr. Lynch did not use direct or implied threats to cause the deal to occur. HP, managed by adults, made a decision.
Now, years and billions later, HP is going to “prove” that a known technology wizard with a strong marketing sense fooled a multi-billion dollar company, its handpicked team of managers and analysts, and legions of brains for hire folks.
I know Dr. Lynch is good. I did not know he was a magician and hypnotist.
Fascinating but HP has to do something in addition to splitting its company in two, ignoring the threat posed by Amazon and its ilk, the absence of management wisdom, and the uncertain market into which HP knowingly jumped.
I wonder if HP will take a look in the mirror and wonder what business message the company is sending. Auto dealers in Palo Alto are probably wondering if they are next to be sued. Every auto salesperson with whom I interacted stresses the positive. I, when the buyer, have to do my homework and understand the facts about a purchase BEFORE signing the deal and forking over hard cash.
Stephen E Arnold, March 31, 2015
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