Can anyone summarize what the core business of EAI is at the moment. Are they a modelling/simulation software company and what is their market. To all the disgruntled employees posting on here, does this company have a strong technical core of people. I have recieved offers to enter a class action against the jokers who run this company. I tried that with Sybase and didnt get anywhere. Does anyone have a take on these class action lawsuits.
In my opinion, the only thing class action lawsuits will accomplish is further punishment of the management, stock price and thus other shareholders. There's almost no hope of recovering a significant amount of your losses through a lawsuit.EAI just about halved in value for the second time in a year. All the money of the company and officers combined wouldn't make a significant dent in that loss.The only people who would profit from a suit against EAI right now are the lawyers. Some companies choose to settle out of court just to avoid the expense and embarassment of defending a lawsuit. The lawyers walk away with a third of that pie and leave each of the shareholders with a few crumbs... far from the amounts they lost. That's why so many lawfirms specialize in these kinds of suits -- they are quite lucrative... for the lawyers.Far far better than a lawsuit would be a personal letter to the management of EAI rationally expressing your concerns and ideas for how the company might address its shareholders to rebuild trust and thus strong stock price support during bad times.
This is probably not the appropriate forum for debating the merits of securities litigation, but since the issue has come up...In the first place, does anybody really think that correspondence from unhappy shareholders has any impact whatsoever on management. If, as the former employees claim, the company operates as a patriarchy with "daddy" knowing all of the answers, why would "daddy" care about investors who have lost money.As for the assertion, "The only people who would profit from a suit against EAI right now are the lawyers. Some companies choose to settle out of court just to avoid the expense and embarassment of defending a lawsuit. The lawyers walk away with a third of that pie and leave each of the shareholders with a few crumbs... far from the amounts they lost. That's why so many lawfirms specialize in these kinds of suits -- they are quite lucrative... for the lawyers." That is not quite accurate. First of all, class action fees are controlled by the court, I have yet to be involved in a case where counsel got "a third of the pie." Second, the real money in the securities business doesn't go to the litigators. It goes to the underwriters and their counsel who get huge fees tied to the size of the deal. Think about the fees being paid in the Sprint/MCI merger.
I have never seen a class action suit benefit a shareholder. At most, people seem to recover a a few cents per share. In one suit, shareholders recevied additional stock along with their pennies a share. And that additional stock is only valuable if the company has the resources to recover and post solid numbers. IMO, the only ones who seem to benefit are the attorneys, who take the money. The company has to put time and money into the suits that should go into reorganizing the business. I think EAI needs some major changes. They seem to have the technical expertise and solid products, but they need help with marketing and support. I thought they made a good start at addressing the issues in the CC, but identifying problems and solving problems are not the same thing. I see a rough couple of months.I would describe their core businesses as 3D engineering, design, and process management software. I would also say that a core business is information-sharing, which is appropriate because design and manufacturing teams have joint information needs. E-Vis is a new way of delivering these capabilities. I still hold the major portion of my investment. I think there are 2 possiblities. Either the company recovers and deals with their problems, or they have to seek a merger partner. There may be disgrunteld employees posting here, as I am sure there is some significant stress now. But the board is anonymous, and anyone can claim to be anyone. I find it interesting that it was through this board that I was contacted about possibly becoming involved in a law suit. I'm sure there are unhappy employees. They are dealing with personal losses from the stock price decline, from the decreased prestige (EAI has been a premier employer in Ames, hiring the best of the best), and from added stress at work as they struggle to solve the problems. But I know at least a few employees very well who, while disappointed with results and stressed by some of the problems, feel favorably about the company and the work they do for the company.
THe following are two links which provide information about lawsuits. The first is an article about the most prolific of the strike suit firms, Miller Lerach et al. Not only does the article state that in suits, between 1/4 and 1/3 of the settlement (capped, I believe, by law at 1/3) go to the law firm, they give specific examples of lawsuit settlements and law firm fees.The second site is from Stanford University, and is a good site for getting information about securities law.It is also intersting that last Spring the Lerach law firm was found guilty by a jury of abuse of process. Before the jury could determine damages, Lerach settled out of court for $50 million, to be wired overnight to the plaintiff. One of the plaintiffs in the case is now the Dean of the law school at the University of Chicago,
For the record:"The first is an article about the most prolific of the strike suit firms, Miller Lerach et al." The name of the firm is Milberg Wiess Bershad Hynes & Lerach. The firm is a competitor of mine, so I would be the last person to sing their praises. Nonetheless, I would point out that negative press has a habit of following people who are successful at what they do -- just ask Bill Gates. Also, the term "strike suit" is not appropriate for Milberg Weiss. "Strike suits" are lawsuits which are objectively baseless. Lawyers who file strike suits have no intention of pursuing the claim, but seek to settle for nuisance value. Milberg Weiss simply does not do this. They may not always win, but I have never seen them sell out or flinch from taking a case to trial. Viewed from this perspective, perhaps it is the firm's perseverance and ability which makes the defendants fear them in litigation. Next:"The second site is from Stanford University, and is a good site for getting information about securities law." As I understand it, this site is maintained by a Stanford professor, Joseph Grundfest, who augments his income by serving as an expert witness primarily for companies accused of violations of the securities laws. Finally:"One of the plaintiffs in the case is now the Dean of the law school at the University of Chicago" The plaintiffs in that litigation were owners of a company which provided expert witness services primarily to companies accused of violating the securities laws.Does anybody see a trend here?
EAI's problems are not routed within its very capable people, it is routed in it's very incapable Management team.I left EAI last year before it's current stock troubles for personal reasons. My reasons did not have anything to do with a lack of confidence in the companies core competencies, or in the technology itself.EAI's technical team is probably one of the best in the business. The level of expertise in Visualization Technologies the R&D team in Ames had was consistently blowing me away. Every time I traveled to Ames, I always learned something new from this team of very good people. They are honest, and they take large pride in their work.Iowa State where EAI was incubated is one of the leading institutions for turning out very competent Visualization experts, and I have personally been to the Iowa State Visualization Lab and seen some of the work going on there. It is really impressive!If you're looking for blame, place it clearly on the heads of the EAI management team. When I was at EAI, they couldn't allow their egos go, and admit they have no idea how to run a software company. The main management team is made up of Professors and their Students from the IA State graduate program. That is great if you're running a PHD program, but not so smart if you're running a business. If I could run the world, the first thing I would do would be to totally restructure this team. Get some people who have successfully run large software companies before, and who have a purely management background. I would get the current management team back into the game of technology, and let them drive the development efforts, and let the corporate types run the business.
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