Hewlett-Packard Shares Tank on Autonomy Accounting Fraud

Shares of Hewlett-Packard (NYSE: HPQ) traded sharply lower on Tuesday, down over 11 percent, after the company disclosed that there had been accounting irregularities at Autonomy prior to HP acquiring the company.HP acquired Autonomy in October of last year for about $10.2 billion. Now, with the fraud, HP said it would take a charge of $8.8 billion.Lost in the shuffle was HP's earnings: the company reported an earnings per share figure of $1.16, more than the $1.14 that was expected on revenue of $29.96 billion, just slightly below the $30.49 billion that was anticipated.HP also provided guidance for the fiscal-year. The company said it expected to post an EPS of $3.40-3.60, and an EPS for the first quarter of between $0.68 and $0.71, less than the $0.85 that was expected.Now trading in the $11 range, shares of HP are around a 10-year low.HP has steadily shed marketcap in recent months, as two of its major sectors -- PCs and printers -- have experienced a secular decline.Short seller and hedge fund magnate Jim Chanos pointed to HP in the summer as a “value trap” -- a company that looked to be trading at an inexpensive valuation, but in reality would continue to trade lower.Renowned value investor Seth Klarman had taken a stake in Dow the component, but a recent 13F filing showed that Klarman had dumped most of his stake.On the earnings call, HP's CEO Meg Whitman said that the turnaround was working, but would be a multiyear journey, and that HP's business environment would continue to be challenging.In terms of Autonomy, she described it as a “work in progress.”Shares of HP traded near $11.70 in the pre-market on Tuesday.