Range of Dell Investor Information Requirements
organizational planning of the Dell valuation project
has generated some very practical questions about the range of
investor information requirements that should be accommodated in an
“independent, peer-reviewed valuation report for the benefit of
shareholders.” Forum participants are therefore encouraged to offer
views about who and what should be considered.
Supporting responsible investor decisions
The purpose of an independent valuation is to provide all investors
with fair access to the information needed to make their own decisions
about a proposal being presented by insiders. We must therefore
understand what information will be relevant to all the different
We must also understand who is responsible for which decisions. All
investors should be able to rely upon a company’s directors for their
informed judgment about what is best for the corporation and the
generalized shareholder interests in it, but not for their judgment
about what is best for the particular interests of each and every
shareholder. As a practical matter, a company’s board is not in a
position to determine the specific interests of each investor, and
even if that were possible it is unlikely that a single recommendation
would be equally suitable to all of a publicly traded company’s
different investors. In any event, it is not a board member’s job to
decide what investors should do. That is what fund managers are paid
to do, and what some individuals choose to do for themselves.
It must then be the
investor’s responsibility to obtain the information needed for
investment decisions. Generally, the investor can rely upon a company
to provide most of what is required. But investors get relevant
information from a wide variety of sources,
and being a competitively effective investor requires knowing what to
get and how to get it.
This investor expertise can be put to good use in guiding the current
project’s specification of the information to be provided in the Dell
valuation report. We therefore want to invite the best experts, and a
diverse range of them.
views of information requirements
Preliminarily, we are assuming that the project should include
representation of the following variations of information
Active fund managers
– Funds that are managed by professionals who select specific
securities for investment will typically have the expertise required
to perform their own analysis of a company’s long term enterprise
value, and will be primarily interested in access to information that
puts them on the same level as the proponent’s financial analysts.
Passive fund managers
– So-called “indexed” funds generally cannot justify staff expertise
for company-specific value analysis, and will typically need to rely
upon external reports for their consideration of a proposal.
– Individual investor expertise will vary, but it can be assumed that
most will need professionally prepared research and analysis to be on
a level with a transaction’s proponent.
– Whether acting for a fund or other financial services firm, or as an
individual, investors concerned with current investing positions will
need details of valuation variables to understand changes in
expectations of approvals and appraisal rights.
– Analysts providing research and advice to investors can be expected
to want whatever information can be provided to support competitively
distinguished professional services.
Your suggestions of any additional categories, particular needs or
specific candidates we should be considering will be appreciated to
assure our understanding of marketplace needs.
February 28, 2013
Chairman, The Shareholder Forum
Madison Avenue, New York, New York 10022