OT - Since Brady accepted suspension Exponet lost $247M (16%) from valuation

[PatsFanSince74]

You work is only a theory like the ideal gas law. The Colts balls did not deflate the same way and the NASDAQ went up by 4.43% during the same period that Exponent went down by 16%. Was there someone selling during their 93 second stop in the bathroom?

Now stop what you are doing bbobbo and do work like Exponent would if hired to. The reality is they have had a 16% decline since Brady accepted suspension while the NASDAQ went up 4.43%. It is more probable than not their shoddy deflategate work is to blame.

I want Exponent to deny this on their earnings call next week

Might be fun to buy one share and be a Gadfly at their next Annual Shareholders' Meeting.

 

[Kontradiction]

Good. Hope they go tits up.

 

[PatsFanSince74]

Probably not, but it's more probable than not that those cats were told what to write from executives who are in bed with the NFL/every other corp they are hired to substantiate their false claims. The hundreds of millions of dollars of market cap is flushed away mainly from the general public (through direct ownership or through a 401k). Stock options for employees make up a much smaller portion of the entire equity.

In regard to bonuses, it really doesn't matter how companies perform, executives will always get fat bonuses. Look no further than the financial companies who had to be bailed out by the public for tanking the stock market from their incompetence/greed yet they still received massive bonuses. I'd rather not have the little guy (in the company) and the general public be screwed because execs at the top are crooks.

The problem for EXPO is that it does have competitors and the enormous amount of bad press they have received over this is an "added complication" when making the decision to pick your hired gun for a large court case.

Thanks to Google, you can, in seconds, find literally dozens of articles highlighting their work on tobacco, toxic waste and Deflategate.

Any good attorney on the other side would be able to tie any Exponent witness up in knots in front of a jury even before they started their testimony.

Why would a company want to buy that sort of trouble when it can go to an equally competent competitor without all that baggage? That is Exponent's problem.

That is why they planted the NYT article, but as far as I can tell it has backfired on them. Their stock is still tanking and even more experts are publishing highly visible articles questioning their tactics on multiple cases.

 

[PatsFanSince74]

Good. Hope they go tits up.

Unfortunately, they're not in that range yet. But, they could be getting to the point where they are viewed as a bargain and could face a hostile takeover which would obliterate their brand. The stock has now dropped below $50. There is a price at which some company will jump in and try to grab them, but it might be closer to $45.

 

[Dr Pain]

Maybe....TB12 reached an undisclosed settlement with Exponent knowing a dozen plus leading scientists were ready to support Brady in a damages lawsuit against Exponent.
I wish.
Looking at the EXPO chart....the stock price damage occurred the morning after Q2 earnings were released...a 5 cent miss....dropping the stock from $58 to $45 before settling at $49....and slowly fading since. Reading the Q2 summary, Exponent sounds like a company with somewhat erratic revenue due to dependence on big clients...and when projects end new streams must be found. The Wells Report work was very small potatoes for them in terms of revenue.
If....................TB12 had the resolve to clear his name, he should file suit against Exponent ( in Mass. ) and see what shakes out. An "Expert Witness" corporation surely wouldn't want their work dissected in front of a Mass. jury knowing a long list of "experts" will be lined up against them. And when the first domino falls, whether it be a settlement or a judgement for the plaintiff, TB12 should then set his sights on the NFL.
I wish.

PS....regarding Exponents "falling" credibility..... their business model remained successful after their voodoo tobacco science because there will always be two sides (or more) to every argument / case and like the NFL, you go where you know your desired conclusions will be validated (like MSNBC and Fox)
Besides.... 31 fanbases love Exponent's work.

Far more people will have heard of them from deflategate than this tobacco mess.

 

[Hammer of Thor]

PS....regarding Exponents "falling" credibility..... their business model remained successful after their voodoo tobacco science because there will always be two sides (or more) to every argument / case and like the NFL, you go where you know your desired conclusions will be validated (like MSNBC and Fox)
Besides.... 31 fanbases love Exponent's work.

There is a difference between being well-known within the scientific community for providing analysis based on their clients' needs, versus being well-known within the public sphere for doing so. Yes, the LA Times reported on this pre-Deflategate, but it wasn't a big national story then, and firms could still get away with hiring a company like this. Now, sadly every football fan knows who they are, and most fans understand exactly how shoddy of a job these guys did (even if they hate the Pats and believe Brady was guilty, they look at the cell phone and not these guys).

Yes, the earnings drop wasn't caused by Brady accepting his suspension but rather, by the 5 cent earnings miss. Well, why did they miss earnings expectations by 5 cents? Because companies aren't hiring them because they know they are a liability in their field now. The NY Times puff piece pretty much states this with comments from the Exponent people themselves. They have their reputation to stand on -- and no one wants to be associated with a shady industry once their tactics are known to the public. Otherwise the NFL would be using Arthur Anderson as its auditors.

 

[Dr Pain]

Might be fun to buy one share and be a Gadfly at their next Annual Shareholders' Meeting.

There is actually an earnings call next Wednesday where people can ask questions.

Event: Exponent, Inc. Third Quarter of Fiscal Year 2016 Financial Results Conference Call

Date: Wednesday, October 19, 2016

Time: 4:30 p.m. Eastern Time / 1:30 p.m. Pacific Time

Live Call: (800) 768-6563 or (785) 830-7991

 

[PatsFanSince74]

There is a difference between being well-known within the scientific community for providing analysis based on their clients' needs, versus being well-known within the public sphere for doing so. Yes, the LA Times reported on this pre-Deflategate, but it wasn't a big national story then, and firms could still get away with hiring a company like this. Now, sadly every football fan knows who they are, and most fans understand exactly how shoddy of a job these guys did (even if they hate the Pats and believe Brady was guilty, they look at the cell phone and not these guys).

Yes, the earnings drop wasn't caused by Brady accepting his suspension but rather, by the 5 cent earnings miss. Well, why did they miss earnings expectations by 5 cents? Because companies aren't hiring them because they know they are a liability in their field now. The NY Times puff piece pretty much states this with comments from the Exponent people themselves. They have their reputation to stand on -- and no one wants to be associated with a shady industry once their tactics are known to the public. Otherwise the NFL would be using Arthur Anderson as its auditors.

Yeah. It's a chicken and egg argument that could go on endlessly. The point is the trend has continued.

 

[Deus Irae]

Good

 

[PatsFanSince74]

There is actually an earnings call next Wednesday where people can ask questions.

Event: Exponent, Inc. Third Quarter of Fiscal Year 2016 Financial Results Conference Call

Date: Wednesday, October 19, 2016

Time: 4:30 p.m. Eastern Time / 1:30 p.m. Pacific Time

Live Call: (800) 768-6563 or (785) 830-7991

You might be able to do that, but you usually have to be an analyst following their stock or a major shareholder to get put in the queue on those calls. It will be interesting to listen in though! Thanks for the tip.

 

[Dr Pain]

You might be able to do that, but you usually have to be an analyst following their stock or a major shareholder to get put in the queue on those calls. It will be interesting to listen in though! Thanks for the tip.

Brady Research?

 

[Gwedd]

Good

 

[bbobbo]

The problem for EXPO is that it does have competitors and the enormous amount of bad press they have received over this is an "added complication" when making the decision to pick your hired gun for a large court case.

Thanks to Google, you can, in seconds, find literally dozens of articles highlighting their work on tobacco, toxic waste and Deflategate.

Any good attorney on the other side would be able to tie any Exponent witness up in knots in front of a jury even before they started their testimony.

Why would a company want to buy that sort of trouble when it can go to an equally competent competitor without all that baggage? That is Exponent's problem.

That is why they planted the NYT article, but as far as I can tell it has backfired on them. Their stock is still tanking and even more experts are publishing highly visible articles questioning their tactics on multiple cases.

they don't really have any direct competitors--mostly small specialist boutique firms. they work on 6000-7000 projects a year for roughly 2000 clients in the following fields:

Engineering & Other Scientific
Biomechanics, Biomedical Engineering, Buildings & Structures, Civil Engineering, Construction Consulting, Electrical Engineering & Computer Science, Engineering Management Consulting, Human Factors, Industrial Structures, Materials & Corrosion Engineering, Mechanical Engineering, Polymer Science & Materials Chemistry, Statistical & Data Sciences, Technology Development, Thermal Sciences, and Vehicle Analysis

Environmental & Health
Chemical Regulation & Food Safety, Ecological & Biological Sciences, Environmental & Earth Sciences, Epidemiology, Biostatistics & Computational Biology, Occupational & Environmental Health Risk Assessment, and Toxicology & Mechanistic Biology

no other firm can really compete with them in terms of diversity of fields that they cover, so they can actually charge a premium for their services.

 

[Dr Pain]

they don't really have any direct competitors--mostly small specialist boutique firms. they work on 6000-7000 projects a year for roughly 2000 clients in the following fields:

no other firm can really compete with them in terms of diversity of fields that they cover, so they can actually charge a premium for their services.

How many of these are for litigation? These are all at risk as the reason they pay is for their reputation. Hiring Exponent can now be seen as a mark of weakness that you have to hire the guys who will give you what you want. Why do you think that Wells did not carry on with Columbia. I had it on good authority from someone at Columbia Physics that Columbia told them they were out of their minds and after hearing that they went to Exponent.

It is not difficult to set up competing practices. They may not be as broad to begin but they won't be tainted by the likes of Fraudit.org Nominates Exponent’s “DeflateGate” Study for Research Fraud of the Year 2015 (more for its audacity than its impact) – Fraudit.org

 

[bbobbo]

There is a difference between being well-known within the scientific community for providing analysis based on their clients' needs, versus being well-known within the public sphere for doing so. Yes, the LA Times reported on this pre-Deflategate, but it wasn't a big national story then, and firms could still get away with hiring a company like this. Now, sadly every football fan knows who they are, and most fans understand exactly how shoddy of a job these guys did (even if they hate the Pats and believe Brady was guilty, they look at the cell phone and not these guys).

Yes, the earnings drop wasn't caused by Brady accepting his suspension but rather, by the 5 cent earnings miss. Well, why did they miss earnings expectations by 5 cents? Because companies aren't hiring them because they know they are a liability in their field now. The NY Times puff piece pretty much states this with comments from the Exponent people themselves. They have their reputation to stand on -- and no one wants to be associated with a shady industry once their tactics are known to the public. Otherwise the NFL would be using Arthur Anderson as its auditors.

that's one possible explanation.

another possible explanation is that a huge project (5% of revenues) consulting for the 2010 BP oil spill ended abruptly in 2015 because BP decided to settle in october 2015. they were expecting the BP business to taper slowly over time instead of ending abruptly like it did.

also, intellectual property cases, which accounted for 3% of their revenue in 2015, have been halved because the validity of patents are being challenged less often since the USPTO set up an internal process to review patents.

also, revenues from the oil & gas segment, which accounted for 7% of EXPO's revenues in 2015, have fallen to around 4% because of depressed oil prices.

but i guess it could be because of fallout from the deflategate report.

 

[bbobbo]

How many of these are for litigation? These are all at risk as the reason they pay is for their reputation. Hiring Exponent can now be seen as a mark of weakness that you have to hire the guys who will give you what you want. Why do you think that Wells did not carry on with Columbia. I had it on good authority from someone at Columbia Physics that Columbia told them they were out of their minds and after hearing that they went to Exponent.

about 60% of their revenue comes from litigation-related work.

It is not difficult to set up competing practices. They may not be as broad to begin but they won't be tainted by the likes of Fraudit.org Nominates Exponent’s “DeflateGate” Study for Research Fraud of the Year 2015 (more for its audacity than its impact) – Fraudit.org

EXPO has 450 PhDs, while most other employees hold masters. there are smaller specialist competitors, but as i mentioned before, no one at the scale and diversity of different areas that EXPO has.

also, a large portion of their business comes from repeat customers. large corporations are usually victims of inertia--they'll tend to keep using what they've used before, especially if it's a large well known (in its field) company like EXPO. think "nobody ever got fired for buying IBM equipment", or "nobody ever got fired for buying Cisco equipment".

 

[Dr Pain]

but i guess it could be because of fallout from the deflategate report.

Now your on the trolley You can now work there.

 

[Hammer of Thor]

that's one possible explanation.

another possible explanation is that a huge project (5% of revenues) consulting for the 2010 BP oil spill ended abruptly in 2015 because BP decided to settle in october 2015. they were expecting the BP business to taper slowly over time instead of ending abruptly like it did.

also, intellectual property cases, which accounted for 3% of their revenue in 2015, have been halved because the validity of patents are being challenged less often since the USPTO set up an internal process to review patents.

also, revenues from the oil & gas segment, which accounted for 7% of EXPO's revenues in 2015, have fallen to around 4% because of depressed oil prices.

but i guess it could be because of fallout from the deflategate report.

While I get your point, what you need to understand from a business standpoint is that revenues were off 5 cents from *expectations*. The market reacts over two things -- first is a company's initial forecast for its projected future earnings, and second is any deviation from this. The price drop came because of the latter, not the former. All 3 of those items you mentioned happened well before August 2016. These are items that should have and would have been in each of their prior quarterly reports as guidance. They know how much work is in their pipeline (so to speak) and have a good idea as to future impact.

Did they underestimate the impact of those 3 things in their previous guidance? Absolutely, I'm not arguing that's not a reason or even that it's not the primary reasons. But I think it's a little simplistic to think Deflategate hasn't had any impact on their earnings when representatives of the company go on record in a newspaper article aimed at salvaging their reputation, and state that they have in fact lost work because of it.

 

[bbobbo]

While I get your point, what you need to understand from a business standpoint is that revenues were off 5% from *expectations*. The market reacts over two things -- first is a company's initial forecast for its projected future earnings, and second is any deviation from this. The price drop came because of the latter, not the former. All 3 of those items you mentioned happened well before August 2016. These are items that should have and would have been in each of their prior quarterly reports as guidance. They know how much work is in their pipeline (so to speak) and have a good idea as to future impact.

i'm well aware of the difference between estimates vs actuals.

while EXPO knows how much work is in the pipeline, the brokerage firms that make the estimates don't. they have to guess. guidance from the company can give analysts a general idea of what direction the business is headed, but there is a lot of room for error.

Did they underestimate the impact of those 3 things in their previous guidance? Absolutely, I'm not arguing that's not a reason or even that it's not the primary reasons. But I think it's a little simplistic to think Deflategate hasn't had any impact on their earnings when representatives of the company go on record in a newspaper article aimed at salvaging their reputation, and state that they have in fact lost work because of it.

i think we're pretty much saying the same thing, although we may disagree on the relative weightings. i don't think the deflategate report had NO impact, but i think it was very minimal. regarding the Q2 earnings miss, i think the other factors contributed much more.

 

[letekro]

My impression is that the accuracy of the Exponent Report is not a hot topic outside of this message board. Probably not enough to move markets.