The Art of the Bad Deal

Why companies are addicted to misguided mergers — and how it's killing innovation

Illustration by Henry Campbell for TIME

Wall street's disproportionate sway over the U.S. economy has caused big problems in recent years, from the subprime crisis to high-frequency-trading debacles. But here's one you may not have noticed: it's crippling innovation.

To understand how, look at the latest victim, the once mighty Hewlett-Packard. It's hard to think of a company that's been as loved and, more recently, loathed. The godfather of high-tech firms, HP was started in a garage in 1939 by two engineers and came to symbolize the Silicon Valley culture of creativity and collaboration. But that was then. For more than a decade, HP has been plagued...

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