Mismanagement around US companies with billions of dollars wasted everyday

We have no presence in mobile thus far but we have heard that it is a fad these days. So In April 2010 let us buy a struggling and useless mobile handset maker which is anyways getting beaten to death by its competitors.

Mistake #1 Buying a poor beaten down product company which adds no value to the core business line. We want to buy it only because the technology it is in is somehow a fad these days.

Let us pay 30% premium for their crap and thus we will spend a hefty 1.5 Billion dollars on this acquisition.

Mistake #2 Paying a hefty price for this non core, non performing business.

Then in Aug 2011 we have now confirmed that this product company is useless so we no longer need this business now.

Mistake #3 Not having the foresight of knowing what business is helping the core business model.

But wait a minute we have payed the employees of that company for almost a year and a half for doing essentially nothing. 

Let us call the accounting crooks and they will help us take this as an acquisition charge of an additional 1 billion dollars.

Mistake #4 Not knowing that the cost of a non core acquisition is now almost twice the price you pay initially.

Since we are now closing down this expensively bought, non core, non performing business we will have to pay severance to the employees, directors and management.

Not a problem we will take a restructuring cost of almost 2.5 billion dollars again.

Mistake #5 Not knowing that the restructuring costs almost always go hand in fist with an acquisition.

Let us not learn any lesson from the above mistakes and let us now start a new search for a fresh acquisition but this time we will go for a bigger acquisition say a 10 billion dollar acquisition of a cloud based software company. Our VPs and Senior VPs are saying that cloud is the next big fad. We have lot of cash that is earning low interest so let us do some useless acquisition to show the shareholders that we are "doing something".

This is the story of HP one acquisition after another. It started in 1997 with compaq by spending 25 billion dollars on that acquisition and today announced that will close down that division completely. The above story is repeated numerous times on Wall Street be it HP, Cisco, Dell or your favorite ticker.