How to Invest in Stocks: Fraudulent EBITDA

Why do companies pay too much for acquisitions only to realise a few months or years down the line the price was expensive? Restructuring costs become a tool for regular write-downs. It was a joyous day for owners of Autonomy and HP as well as the middlemen when HP acquired Autonomy for $11 Billion in 2011. Fast forward to this day, the US Department of Justice has filed criminal charges against sellers of Autonomy whilst HP takes an $8.8 billion writedown on the acquisition. This and many other cases abound where the wrong valuation metric has been used with a resulting car-crash scenario in post-acquisition.