Department of Justice to Investigate Hewlett-Packard’s Accusation of Accounting Fraud by Autonomy (HPQ)
In a report filed on Thursday, the Hewlett-Packard Company (HPQ) confirmed that the Department of Justice is launching a probe to investigate the alleged accounting fraud by the HP acquired software company Autonomy.
The Palo Alto, CA-based HP purchased the British software company last year for $11 billion to add a profitable source in the software sector of its company. However, Autonomy did not deliver the expected growth leading to founder Mike Lynch’s departure earlier this year.
Last month, Hewlett-Packard had to write off approximately $5 billion of Autonomy’s value and accused Lynch and former management of inflating the value of its company through accounting improprieties.
Mike Lynch is defiant in his defense of his management of Autonomy; he denies any allegations of accounting fraud despite information obtained by a whistleblower within the company. He said he will cooperate in the SEC and Department of Justice investigation.
HP shares were a bit down in premarket trading on Friday. The stock is down -45.5% year-to-date.
The Bottom Line
Shares of Hewlett-Packard (HPQ) have a 3.77% dividend yield, based on last night’s closing stock price of $14.04. The stock has technical support in the $12 price area. If the shares can firm up, we see overhead resistance around the $16-$17 price levels.
Hewlett-Packard Company (HPQ) is not recommended at this time, holding a Dividend.com DARS™ Rating of 2.8 out of 5 stars.
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