What's with the tech sector?


The driving force behind the deal was a VC on the HP board who had a massive conflict of interest in the deal (I’ll dig up the article with the gory details). Apotheker was the VC’s sock puppet, as was the guy who legal and all the due diligence work was reported to (the CSO).

You will find that HP legal did all the due diligence and will have found all the problems I talked about last year, and I’m sure a lot lot more besides based on my own personal experience, and that all this material was ignored by Apotheker. This is way way bigger than the fraud at Computer Associates so it will interesting to see if the SEC (or any local Federal DA) has the balls to send anyone to jail. Based on what I’ve heard there is enough evidence to send at least half a dozen people to jail for this one.


Ho hum, more vapourware exposed as such. JLee pegged why: viewtopic.php?p=534340#p534340

The numbers simply were not credible to anyone in big data. The whole datamine:goldmine thing is a crock. Not a crock of gold…

HP will survive, though. Might even be better at the end if the shit-swallowers are given the boot. Whole swathes of them have to go. Meanwhile HP needs to refocus its customer offerings to its big customers (I work for a big customer of HP) - their customers need to feel two things:

  1. They wouldn’t be better off with someone else providing the service.
  2. They wouldn’t be better off doing it themselves…


Here is the guy mostly responsible for the Autonomy acquisition debacle.


Here is some of the political background in HP…


Still have to find the article that details how Lane got Apotheker hired and how he did the back room maneuverings to ram the deal through. A lot of people inside HP were completely against the deal but Lane steamrollered it through. The deal would never have got past go without Lane.

You should not forget Lanes ( or Apothekers ) Oracle connections when trying to follow the often byzantine goings on. For wherever you turn is the spirit of Ellisons, past, present and future.


So Flash (and Slasher too) it seems “George Costanza” was right after all. Autonomy was just your common or garden variety stock fraud. I was going to ask if you know of any other sure fire winners like Autonomy out there so I can tell people to avoid them. But I think I’ll hold my tongue…

There is a very good reason why I never ever invest in high tech stock (or offer stock tips) . I know what goes on inside the companies. The (very few) well run high tech companies are mostly private so most of the public ones stock tends to be little more than pump and dump operations run by market insiders. Really nothing more than a casino. The Hedge Fund Motel called AAPL being the classic example at the moment. There is no knowing exactly when the eventual dump will happen. But happen it will. Because it always does.

At least when you go to Vegas or Reno you get free food and maybe even a show while they fleece you. And with Reno you can stop off at Lake Tahoe on the way home. On the whole a much more enjoyable, and just as profitable, experience as buying most high tech stock.


You said the deal wouldn’t close, you were adamant. I disagreed. You weren’t right, though you did insult me for asserting that the deal would close.

If you can quote me singing Automony’s praises I’ll take it back. Meanwhile your beloved Sony has been downgraded to junk.

BTW I haven’t bought or sold a tech stock (in any capacity) in the last decade


www8.hp.com/us/en/hp-news/press- … KwXKWfFKSp

How the fuck did the DD miss that?


I wonder were these ‘value-added resellers’ booking the transactions as billion dollar assets … I somehow doubt it … could these VARs have been linked the now very, very, wealth Autonomy bods ? :angry: :nin

The Register mentioned that the scam, sorry, Scheme, only came to light when an executive left over from the previous Autonomy setup pointed it out.

That must have been some seriously pissed off Autonomy employee 8- 8- 8- :smiling_imp:


What a great thread. Well done JMC!

What I vaguely remember from revenue recognition tech businesses I looked at was there was “debtors” and there was essentially “un-invoiced debtors”/accrued income where they recognise revenue but don’t bill the customer…because the customer would tell them to get lost :laughing:
Then you capitalise loads of expenditure so the expense only goes through the P&L as a trickle.
Hey presto…you’ve got “Profit”

It seemingly isn’t only property fools who buy a business for a multiple of its Gross Income!


Hi all, I try to assess what net income an IT contractor can reasonably expect based on the daily rate. I need some input on this since I am not an expert in the field. And having read the pin forthe last 6 years (!) I know there are some real analytical posters here who might be able to help me. Hopefully this post does not derail this thread.

Say annual income is 230 days * 400 daily rate = 92000
I plan to set up limited company with myself and spouse being a director. I pay myself (41.800 annually) and her (23800 annually) which according to deloitte.ie/tc/ will give us a combined net annual income of 53760 (I ignored pension’s contributions in the calculator, have kids and am not a proprietary director (?)).
End of year there is 92000 – (41800 + 23800) = 26400. If I extract that I have to pay 41% tax, 7% USC and 4% PRSI so net will be left 26400 *48% = 12672. Total net income is 66432.

  • Are the above calculations correct? For instance, I pay tax, PRSI etc as if I was an employee. Correct? Or do I pay less being director?
  • I ignored pension side of things (manage that myself). Or are there major advantages one can benefit from pension wise when in limited company
  • What is best practice on expenses, would that add to net income?
  • Did I miss any **other major factors **that can influence net pay?



The reason why I thought at the time that deal would not go through is because all previous deals like it, that had stunk that badly even from a distance, had failed at the due diligence / post initial signing stage. I had seen it happen up close two times before and the third time the deal only went through (after my time) because it turned out that the CEO had a sexual harassment charge against him which he was going to lose big and the sell on would effectively end the case. The deal was so badly drafted that by the time the deal closed several months after the initial offer the company, one of the leading consumer software companies at the time , was sold for net MINUS $200M.

At the time I could not understand why this deal was finalized and had not been litigated but it turned out the CEO was in a huge hurry to close the deal and all the standard due diligence clauses were effectively negated in the original acquisition agreement. The one major shareholder who could have stopped the deal was the founder. But by this stage he had had his mid life crises and had dumped his wife of decades, married a woman several decades younger, and moved to a rich peoples resort in the Rockies where he build a multi million dollar house themed around one of the companies most successful fantasy games. So he was otherwise busy living in a middle aged fantasy land.

This is the real world of high tech, very different from what you reed in the financial press…

What I did not know at the time I wrote last year about the HP/Autonomy deal was the Lane was playing his own games going back to his ill fated time at Oracle. That there was such a power vacuum post Hurd and the rest of board was paralyzed by a surfeit of power crazed prima donnas that Lane was able to ram though to completion a catastrophically bad deal. The way Ellison was able to utterly humiliate Lane at the time of the deal showed that Lane is just another Sand Hill blow hard ass hole is a very expensive suit. That Lane may have been a good division guy but he really was not up to running Oracle. Or at least Ellisons Oracle.

As for Sony. I was talking about Sony as a product company, not Sony as an investment. As an investment its toast for quite a few years to come. With the way Japaneses companies work it will take at least a decade or so for Sony to evolve into what it becomes next. The main crisis has been in the TV division which has been the core of the company for several generations. Basically the Koreans and Chinese have gutted what had been the core of Sony and now Sony has to work out what they do next. Fight? Or move on? And being a Japanese company (despite Sir whats-his-name) it will take a long time for that consensus to emerge. But it will. Sooner or later.

But there will be a Sony plodding along doing what they do best in several decades time. I’m not so sure about either HP or Apple. The brand names will survive but the current companies will not survive the long term. Which in Japaneses terms means decades. Not the next few 10Q’s.


HP has a disastrous history when it comes to acquisitions. The 8bn write down of EDS didn’t get the same press and Meg has conveniently glossed over the fact that she was board when the paid a 50% premium or whatever it was, it was never going to be good for shareholders. Wonder how Palm is working out for them.

Re. what i read in the Financial Press : I’ve served my time in the tech sector. You’re welcome to it. The only Asics I ever want to see again are my running shoes.





HP Lacks `Consistent Culture,’ Kaplan Says -> bloomberg.com/video/hp-lacks … 05EZA.html


For further background about how M&A “due diligence” really works in the tech business there is some great back ground here…


Click through to the original NYT article for the fine details.


It covers all the important points. The only thing unusual about this particular M&A debacle is that it actually went to court. In my experience the majority of tech M&A’s are to a lesser or greater degree no different to the Dragon clusterfuck. Normally the people responsible are just shuffled off to somewhere else a few quarters later.

I remember when L&H blew up in 2000. And not being terribly surprised at the time. Everyone thought there was something fishy about L&H. Their numbers did not add up. It looked at the time like the Bakers at Dragon were dot com greedy in going for an all stock deal (first huge red flag) and had a reputation in the business of being difficult to deal with. Not quite in the Quark league but close. The fact that Caere picked up the assets for a song just reinforces the impression that the Barkers were greedy and stupid and trying to play a game completely out of their league.

So there would be nothing terribly unusual about the principals at HP at the time of the Autonomy deal doing little or no true due diligence and playing stupid petty political games. Or in Autonomy grossly misstating their accounts. Considering the long tradition of fraudulent accounting practices in the software business with a person like Lynch I’d be shocked if their a/c’s actually were truthful.


From 25th September 2011:

From May 25th 2012:

Fair play, you know your industry.

So is Lynch going to jail?


If you hang around long enough you end up having seen everything at least once before. Some of the best stories, Wordstar, Quark, Wordperfect, Ashton Tate, Learning Company etc never see the light of day even though they are far more fantastical than anything one reads in fiction. It makes Hollywood look like a buttoned down 9 to 5 insurance business. When gross margins are 90% there is no plausible limit to just how badly management can fuck up and still have a functioning company.

As for Lynch? If he had been based physically in the US for any amount of time then there might be some chance of him following the Computer Associates people to jail. But considering Lanes role in the debacle on the HP side and it being a foreign company I think Lynch will get away with it. I’m sure the accounts where fraudulent but in the bigger scheme of things the fraud by O’Leary at Softkey/Learning Company / River Deep and at Quark under Ebrahimi were in a completely different league. And neither of those guys will ever have their day in court.


bloomberg.com/news/2013-01-1 … firms.html

For a laugh, you should read Barbarians at the Gate - en.wikipedia.org/wiki/Barbarians … JR_Nabisco.

Cue massive job cuts to achieve savings before Dell does public again in 3-5 years.

Dells are still all about products with only 6.8% of their 2012 revenue from services.

Dell do not understand software or services and have no effective strategy in this area. Witness their lack of a real mobile or tablet strategy or offerings: too little, too late. They have a disconnected management structure that creates a fragmented approach to growth and acquisition. Just look at the pointless and expensive Quest acquisition, a company that made money on overpriced software for AD and Exchange upgrades/roll-outs in a market that is disappearing.


Story carried by Silicon Republic, 15th Jan 2013



Blue Horseshoe


From the way I’ve seen Dell written up in business cases and the like, I would say their key competency was really supply chain management and logistics. Let them achieve a very high level of customisation, with minimal inventory and working capital requirements in fact being financed by customers (we take money now, ship PC in a few days) and suppliers (we take goods now, pay you in a few weeks). Let them insure against tech-shifts within a narrow set of bounds (i.e. new graphics cards models etc.,) but as you say doesn’t necessarily help them when faced with major generational shifts in technology model.

As an aside, anyone every used Dell UNIX?:
Was always a curiosity of mine (saw it mentioned in passing in documentation of first PC I ever had, before I even knew what UNIX was).


Dells LBO could hinge on the cash pile outside the US

businessweek.com/news/2013-0 … -dot-s-dot

Not easily accessed…