HP Settles Securities Fraud Case for $39 Million

HP Settles Securities Fraud Case for $39 Million

HP has agreed to pay $39 million to shareholders to resolve accusations that it made misleading statements regarding its supplies division. The settlement addresses claims that the company provided false information about the financial health of its ink and toner cartridge business. This agreement brings to a close a long-standing investor lawsuit alleging that HP artificially boosted the perceived value of the division.

HP will pay $39 million under the settlement, which ends investor claims of fraudulent reporting tied to the supplies business. Shareholders argued that the company misrepresented the performance of its ink and toner unit, a central part of its operations. The resolution concludes years of litigation over accusations that HP engaged in deceptive practices to inflate the division’s value.

The settlement follows a series of financial challenges for HP. In its most recent quarter, the company reported earnings per share of $0.71, below Wall Street’s expectation of $0.80, despite posting a 3.3% increase in revenue compared to the previous year. The disappointing results have drawn analyst scrutiny, with several firms downgrading their ratings and trimming price targets for the stock.

At the same time, institutional investors have shown renewed interest in HP. During the fourth quarter, several firms increased their stakes, including Versor Investments LP, which boosted its holdings by 88.5% by purchasing an additional 41,700 shares. However, the stock remained under pressure, slipping 0.7% on the day the settlement was announced.

This settlement represents an important step for HP as it addresses long-running allegations of improper conduct. The company has faced criticism for its management of the supplies division, a focal point for both investors and analysts. While the resolution could help restore some investor trust, its longer-term effect on HP’s share price is still uncertain.

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