While many investors were caught off-guard Tuesday morning by the giant, allegedly fraud-ridden write-down by Hewlett-Packard f the value of Autonomy, hedge fund manager Jim Chanos wasn't one of them.
(Read more: Hewlett-Packard Walloped by Charge Relating to Fraud)
Chanos, the founder of Kynikos (greek for "cynic") Associates said HP was one of the companies he regarded as "the ultimate value trap" in a presentation delivered in July at the Delivering Alpha Conference sponsored by CNBC and Institutional Investor.
(Read more: Jim Chanos: Hewlett-Packard Is 'Ultimate Value Trap')
Chanos related the story of why he began to consider shorting HP . He had been short Automony, the British cloud-based business software and data company. When HP bought the company at a hefty premium, this raised a red flag for Chanos. What's more, Chanos pointed out, several top Autonomy executives left the company shortly after the acquisition.