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HP to buy Autonomy for $11 billion

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Re: HP to buy Autonomy for $11 billion

#41
post #34

I've always thought that Autonomy had a strong whiff of fraud about it. I never hear anyone talk about working there, their financial reporting is often shadier than Groupon's, there's a Madoff-esque figure at the top (in the sense that he seems to be treated as almost godlike), and no-one seems to use its products. I know it powers the FT's search facility and they joke about how useless it is. My only explanation h…

Oh man, Autonomy. I know some people who worked there after the Interwoven acquisition. They uniformly described it as a disaster. Million-line codebases with no unit tests (and a UK dev office that didn't care). Routine selling of non-existent features, followed by dev getting shit on because they had to work over the weekend to make a proof-of-concept for it. High-priced sales-engineers who spend 6-8 weeks on site…

As far as I can tell, the threshold for joining sales engineering there is surprisingly low.

BUT... keep in mind, they intentionally don't educate their pre- and post-sales folks about the actual capabilities and flaws in their approach. The training I got was basically useless---a week of having someone read the getting started guide to us.

Apparently, one of the earlier sales engineers had written a "real guide to IDOL" or some such, intended to help new sales engineers actually know what to do. Autonomy's CTO had all copies of it deleted, because it referred to bugs and shortcomings that they'd signed contracts claiming didn't exist.

Re: HP to buy Autonomy for $11 billion

#42

...along with plans to spin off its personal computer business. Damn, until now I'd missed that this wasn't "only" about phones and pads; HP's planning to become a software-only company! Very saddening.

According to press pundits, it is because Apotheker wants to turn HP into enterprise software+services company, like SAP and IBM.

Re: HP to buy Autonomy for $11 billion

#44
post #6

Even after today's surge (+75%), its market capitalization is $6.11B. Yesterday's market cap: $3.5B. Why would HP pay 3X its market value?

The normal reason for paying large premiums is that shareholders aren't interested in selling at the current market rate (otherwise in a liquid market they already would have). If you offer a small premium of say 10% investors might just think there is a better deal out there. Consequently the market value of the company may jump by 15% forcing you to make a new offer of 20% which the market still doesn't accept etc.…

This sounds good and perhaps you have some financial experience to back this up, but I fundamentally disagree. At some point even a complex sale is just that...a sale, and this one is so questionable that anyone ignoring details like you put forth anyone would question this. Let alone the rumors of AU being a house of cards- in this market, HP should have walked and probably could have purchased AU for under $5B and the AU management would have run for the hills with the cash. Bottom line- it's a total enigma...time will tell!
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