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Lawsuit: HP’s Snapfish Duped Customers And Stole Money
What would you do with a credit limit of $12 billion?
If you’re Hewlett-Packard, you would use that money to enrich your stockholders with share buybacks.
Hewlett-Packard borrowed so much in 2011 that it has hurt its ability to get the short-term loans it needs to sustain its daily business, says a report from Bloomberg.
HP issued a staggering $12.6 billion in bonds this year. It used most of that borrowed money to help fund $7.3 billion of stock buybacks that occurred in the six months ended July 31.
What it didn’t spend on shareholders it tossed at the $10.3 billion purchase of Autonomy, Bloomberg says.
SP sliced HPs long-term debt rating to BBB+, the third-lowest investment grade.
Rampant borrowing isn’t the only thing that has investors nervous. Out of the 1,500 public companies that investment analyst firm Disclosure Insight monitors, HP is one of 106 to be stamped with a “highest risk” rating in a report issued earlier this month.
The company faces a boatload of potential bad news from ongoing government investigations, DI says. For instance, the SEC and DOJ have been investigating HP since September 2010 for allegedly bribing Russian officials over a €35 million ($46.3 million ) contract.
Not good.
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Article source: SAI http://feedproxy.google.com/~r/typepad/alleyinsider/silicon_alley_insider/~3/PyvhwMZ5an0/yikes-hp-racked-up-126-billion-in-investory-ious-2011-12