TOP 5 SPREADSHEET DISASTERS

Spreadsheet Mistake Costs Tibco Shareholders $100 Million. That’s the lesson Tibco Software Inc. and Goldman Sachs Group Inc. learned in the software company’s more than $4 billion sale to Vista Equity Partners, which is paying about $100 million less in the deal because of a spreadsheet mix-up. Goldman, Tibco’s adviser in the deal, used a spreadsheet that overstated the company’s share count to crunch the numbers in the deal, according to a regulatory filing. The error led to a miscalculation of Tibco’s equity value, a $100 million savings for Vista and a slightly lower payment to Tibco’s shareholders (roughly 61 cents for each outstanding share).

Kenneth Rogoff was at the centre of worldwide attention with Carmen Reinhart when their widely cited study “Growth in a Time of Debt” was shown to contain spreadsheet errors which critics claim undermine its central thesis that too much debt causes recession, the basis for the policy of austerity in many countries.

JP Morgan reported its internal findings into the 2014 $6.2 billion loss when positions in a small, opaque derivatives market quickly lost value under a squeeze by several hedge funds. The report covered a catalogue of spreadsheet errors and control issues alongside significant management and operational deficiencies. Spreadsheets were mentioned 14 times in the report.

Spreadsheet modelling errors are being blamed for the botched bidding process on the £9bn West Coast Main Line rail franchise contract. The four bidders were refunded a total of around £40m; with three other franchise bids put on hold, the ultimate cost to the taxpayer could be as much as £300m.

Britain’s second largest drugmaker AstraZeneca (AZN.L) was forced to reiterate its 2011 and mid-term financial forecasts after inadvertently releasing confidential company information to analysts. As a result the firm’s shares went down 0.4 percent. Confidential company information was inadvertently embedded in a spreadsheet template sent to a sell-side analyst community that follows the company.