Beyond Business Intelligence
Predictive Science for Today's Bottom Line
Beyond Business Intelligence
Predictive Science for Today's Bottom Line
Predyct Analytics takes a different approach to serving its customers from that of its competitors in the fields of consulting, investment banking, and proxy voting & advisory services. Predyct focuses on those issues that are closest to the critical drivers of firm shareholder value. We only focus on those issues that are of the highest strategic importance to companies rather than on every tactical and operational issue. We only focus on tactical and operational issues to the extent that they are of the utmost strategic significance to a firm’s shareholder value—and sometimes they are (See Hewlett Packard Case History C-3). We advise company management, stakeholders and shareholders of a company’s most significant issues based on their current situation using risk and financial technologies that have taken decades to fully develop and that are not easily duplicated. The output of our strategic diagnostics and assessments can be used by:
Historically, the courts have invoked the Business Judgment Rule (BJR) to protect corporate boards and officers. The BJR acknowledges that the daily operation of a business can be innately risky and controversial. Therefore the board of directors should be allowed to make decisions without fear of being prosecuted. The BJR further assumes that it is unfair to expect those managing a company to make perfect decisions all the time. As long as the courts believe that the board of directors acted rationally in a particular situation, no further action will be taken against them. Another way of putting it is that the courts have been reluctant to allow shareholders to pursue claims against the board that the court felt could only be seen (as obvious) in hindsight.
Modern Financial Theory and the science of Contingent Claims have evolved in sophistication to the point that these methodologies can be used to demonstrate that many corporate actions can be shown (axiomatically) to destroy shareholder value the moment they are executed rather than waiting for the benefit of hindsight. The financial tools of Modern Financial Theory and Contingent Claims are mainstream methodologies that are accepted as the basis of establishing legality and clearing prices throughout the financial system. In shareholder actions the courts have ruled that the Business Judgment Rule (BJR) cannot be used to unduly protect a board or corporate officers from successful prosecution if they have not satisfactorily complied with the Informed Judgment Requirement (IJR). The Informed Judgment Requirement mandates that corporate officers and board members must avail themselves of expert opinion on certain business matters that they themselves may not possess before acting on behalf of the corporate interest. In response to the IJR corporate boards now require Fairness Opinions on their most significant decisions affecting corporate values, particularly related to mergers, acquisitions and divestitures. This requirement does not absolve board members of liability and their recourse is back against the firm providing the Fairness Opinion. The Predyct Analytics case histories that are most applicable to this observation are: C-1, C-2 and C-3—See Case Histories. In these particular cases Modern Financial Theory and Contingent Claims has demonstrated that the destruction of value resulting from specific corporate actions was completely predictable in real time rather than something that could only be seen in hindsight. This Predyct Analytics capability leads to a much better chance of success for claimants.
Review our case histories and see if you agree that Predyct Analytics has provided timely advice to companies well in advance of other advisors, rating agencies, regulators, stakeholders or shareholder actions. Most often, our advice has been provided sufficiently in advance to allow potentially distressed companies to escape their situation or to capitalize on an opportunity.