Re: Not necessarily!
Yup, it's a strange case. As well as the.. optimistic PE, there was also the simple 11x revenue metric.. So from memory around $840m annual revenue. 3x is a more conservative value, but hey, this is software. Crazy valuations have never seemed to bother Tesla investors, and oddly, one of the emails referred to in the indictments was an 8th May message referencing Tesla and DD, presumably due diligence. That's appeared in the indictment that was successfully prosecuted, and in the current Lynch case.
Indictment doesn't go into any more detail about why that email was smoking, and only refers to a transaction where revenue recognition from a licence may have been altered around that time. There's other stuff alledging Autonomy failed to disclose side letters on deals that may have altered the risk profile and valuation of those specific deals. Then there's more serious looking allegations, ie altering licence dates.. Which is presumably a bad thing, if the customer was unaware/not involved.
But like you say, it didn't make sense. Based on the company filings and statements, there was nothing there that seemed to justify HP's price.. And given the huge premium, would imply that either a) HP went nuts, or b) Autonomy failed to disclose some hefty material information to shareholders/the market that would have attempted to justify HP's price.
There's also some other oddities, like HP saying they expected Autonomy to be a pure-play, high margin software house, but also mentioning Autonomy's 'appliance' play.. Which ISTR was Autonomy's system on HP tin.
(ps.. I also tend not to read too much into share prices given that's just what the market thinks something is worth, rather than what the fundamentals suggest it should be worth. Old fashioned thinking when it comes to tech stocks I know.. Plus share value can be even less of a useful metric if trading's illiquid.)