PeopleSoft v. Oracle
Analysis Group supported attorneys representing PeopleSoft in a suit against Oracle alleging that Oracle's tender offer and subsequent actions were intended to drive down the value of PeopleSoft. Under the direction of our academic affiliate Robert Hall of Stanford University, our team, led by Managing Principal Bruce Deal, undertook a comprehensive damages analysis, examining sales data to assess lost sales opportunities associated with Oracle's actions. We also developed projections of the future impact of Oracle's actions on PeopleSoft's sales related to both loss of current revenue streams and a decreasing customer base, and analyzed the impact of lost sales resulting from uncertainty in the marketplace.
In quantifying damages, Professor Hall drew on Gibrat's Law of Proportional Effect, which states that the expected growth rate of a firm is proportional to its size. Professor Hall's analysis focused on the long-term financial implications of a shock to a business, such as that which PeopleSoft would be subject to as a result of Oracle's actions. Oracle's attorneys' attempt to have Professor Hall's testimony excluded was denied; ultimately, Oracle's tender offer was increased, the companies were merged, and the case was dropped.