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Investors Bailing On SCO Stock, SCOX Plummets
Posted by
kdawson
on Mon Aug 13, 2007 04:29 PM
from the is-it-wetter-underwater-than-when-it-rains dept.
from the is-it-wetter-underwater-than-when-it-rains dept.
HailDorothy writes "SCO's stock price is plummeting in the aftermath of Judge Kimball's ruling that Novell owns the UNIX copyrights, as we discussed earlier. '[W]e will continue to explore our options with respect to how we move forward from here,' SCO said in a public statement issued in a futile attempt to calm investors. SCO's stock price has fallen 70 percent during trading today, reaching a 52-week low. It looks like the end is near for SCO, which still owes Novell 95 percent of the SVRX UNIX royalties it collected from Microsoft and Sun through the SCOsource program. As Judge Kimbell noted in his ruling, it's unlikely that Novell will ever be able to collect on those royalties."
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An anonymous reader writes "The one summary judgement that puts a stick into SCO's spokes has just come down. The judge in the epic SCO case has ruled that SCO doesn't own the Unix copyrights. With that one decision, a whole bunch of other decisions will fall like dominoes. As PJ says, 'That's Aaaaall, Folks! ... All right, all you Doubting Thomases. I double dog dare you to complain about the US court system now. I told you if you would just be patient, I had confidence in the system's ability to sort this out in the end. But we must say thank you to Novell and especially to its legal team for the incredible work they have done. I know it's not technically over and there will be more to slog through, but they won what matters most, and it's been a plum pleasin' pleasure watching you work. The entire FOSS community thanks you for your skill and all the hard work and thanks go to Novell for being willing to see this through."
Submission: Investors bailing on SCO stock, SCOX plummets by Anonymous Coward
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Woohoo (Score:5, Funny)
Re:Woohoo (Score:5, Interesting)
http://www.sco.com/company/profile.html [sco.com]
"SCO owns the core UNIX operating system"
Uh, no. How long do they get to keep saying things like this before they're up for contempt of court too?
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money money money (Score:5, Funny)
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Dead cat bounce (Score:5, Insightful)
Looking to cash in on the 'ol dead cat bounce? Considering SCOX has always managed to bouce back over the $1 mark to avoid delisting I suspect you might be right. Not going to bet money on it though, this time even former cheerleaders like Daniel Lyons at Forbes say they are dead. Darl has a big ol fork sticking out of his forehead.
Yes they will file a desperate appeal with every court that might possibly have jurisdiction. No it isn't going to help them do anything other than drag this thing out to the end of the year, January at the best. Then it is over and the patent wars will move from saber rattling and into the shooting phase.
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Re:Dead cat bounce (Score:5, Insightful)
The share trading that occurred during this whole process is likely to come under review in what is now starting to look like nothing more than a pump and dump scheme ie. sue IBM for billions with no hope of winning but have a sudden influx of funds to fund the case which just happens to come from one of IBM biggest competitors.
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Now Wash Your Hands. Re:money money money (Score:5, Insightful)
Anything dropping like this just has to bounce!
It may make a splash, but most people just flush it.
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Re:money money money (Score:5, Funny)
Especially when the company seems so confused about what exactly their assets even are.
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Re:money money money (Score:5, Funny)
Especially when the company seems so confused about what exactly their assets even are.
Oops... Sorry, that was Google.
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Re:money money money (Score:5, Funny)
They help create a market for tinfoil hats, of course.
http://finance.yahoo.com/q?s=aa [yahoo.com] Alcoa up 1 cent...
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Victory! (Score:4, Funny)
Now bring on Microsoft!
Wait... um....
Damn... this ain't gonna be so easy.
Where's the Tylenol?
Wow! (Score:5, Insightful)
Re:Wow! (Score:5, Insightful)
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Re:Wow! (Score:4, Insightful)
How high would the stock go if that happened?
It could have been a rational gamble^Winvestment depending on what you judge those two numbers to be.
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Someone bought those shares today. (Score:5, Interesting)
http://finance.google.com/finance?q=scox [google.com]
Stock cannot sell if someone isn't buying. Who's buying?
Now I know about "short" and "long". But that's more easily described as a bet where you bet the stock will go one way and someone else bets the stock will go the opposite way. I understand about people having to buy stock to cover a mistake in a short/long. But that's an awful lot of shares being purchased.
I don't believe that there were than many people betting that it would go up again. Not with the approximately $9 million dollars it would take to have that stock last Friday.
Who's buying the stock and why are they buying it?
I can understand everyone wanting to sell it. I don't understand anyone buying almost 6 millions shares of it today.
Unless it's another scan by SCO to buy stock options from their executives. Trying to empty the company's coffers before Novell gets its cut or IBM beats them.
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Re:Someone bought those shares today. (Score:5, Funny)
Me.
Gag gifts for the next decade and the pretense of luxury. Some people snort coke with a twenty dollar bill. I curb my dog with stock certificates.
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Re:Someone bought those shares today. (Score:5, Insightful)
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Re:Someone bought those shares today. (Score:5, Informative)
My guess would be that a large number of short positions were closed today. Lots of people had shorted SCOX (i.e. borrowed them, then sold them at some earlier date). Today, when the price dropped, they re-bought the stock at the current market price and returned them to their owners.
I personally haven't had enough experience with the market to know how big an influx of short closers it would take to drive the stock price back up again.
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Re:Someone bought those shares today. (Score:5, Interesting)
The more likely explanation for most of today's volume is day traders trying to make a quick buck on a suddenly liquid and highly volatile stock. Almost 6 million shares may have been traded, but my guess is that that represents a significantly lower number of shares traded back and forth multiple times.
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Re:Someone bought those shares today. (Score:5, Insightful)
If something's cheap enough, there will always be someone willing to buy it.
If it gets low enough, someone could snag it if for no other reason than to liquidate its assets. All of those desks, computer monitors, and coffee machines have got to be worth something.
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Re:Someone bought those shares today. (Score:5, Funny)
Probably not that many coffee machines.
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Re:Someone bought those shares today. (Score:5, Interesting)
I don't know about the volume of stock being shorted, but I remember several people on
It's too bad I just wasn't in the financial position for a medium-term investment a few years back. After the initial speculation (it -was- theoretically possible that SCO's code had gotten into Linux, much like it was theoretically possible that SCO owned the copyright for UNIX), there was a lengthy period where it was clear to us geeks that SCOX had no case (when they were finally forced to produce some evidence, and came up with nothing better than a few lines from standard header files) but wouldn't have been to the majority of investors. This was also around the time their stock was riding high. This would have been a perfect time to short. Though, as I mentioned, I'm obviously not the only one who had this idea and it may have already been to late to find any shares to short.
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Re:Wow! (Score:5, Insightful)
Well, here's how it was explained to me:
SCO is so dirt-cheap right now that you can basically play with it without risk. At a dollar a share, you can buy a block of 100 shares and if it tanks you've lost a whopping $100. However, if by some miracle they actually managed to win, maybe that $100 would become a few thousand. Basically, it had a huge potential upside with almost no downside and a lot of people bought it just to see what might happen.
Well, that upside just vanished and the stock plummeted. You could also interpret this as meaning that 70% of SCO's market value was based on potential lottery winnings, and when the lottery date came and went without SCO winning, its price dropped to compensate.
But IANA stock analyst, so take that with a grain of salt.
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Re:Wow! (Score:5, Funny)
Okay, but now I'm thirsty and I still don't know if I should trust your advice!
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Re:Wow! (Score:5, Funny)
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Re:Wow! (Score:4, Insightful)
But that aside, it's quite likely that investors don't know jack about IT. How else do you want to explain dot.com? We all know (at least I hope that me and a few friends ain't the only ones) that this HAD TO collapse. It couldn't fly. I guess anyone with a background in BA and IT knew it. Just, those people are very, very rare and they usually used that knowledge for a quite legal get-quick-rich scheme, so they shut their mouth and cashed in.
They generally believe in large corporations. Usually this belief is justified. There is no chance in hell that Coke's ever going under. No matter what happens, no matter how bad the economy, no matter what crisis, no matter what war. Coke will survive it.
It's also likely that they didn't realize that pretty much the complete asset of SCO hangs on this suit. SCO is a pretty large company. Or was, at least, but it still has a name. Names and brands are quite powerful in the investment biz (mostly for the formentioned reason of survival). Virtually no large corps hang on just one single product.
Then there's the tendency of justice to know jack about IT either. So the chance to get a favorable verdict for SCO was actually not really zero. There have been other verdicts that contradict anything remotely touching common sense in the IT department recently.
This is what I think is the reason why investors even considered SCO stock. Yes, it was a risky paper, and at least many might have known. But they relied or believed (you might notice how often I use believe. Mostly because it has a bit of a religion) on assumptions based on recent events and developments. Not so much on reality or logic. Like I said, reality and logic had little to do with many judicial decisions in the IT biz lately.
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SCO implodes, Rove resigns ... (Score:5, Funny)
Re:SCO implodes, Rove resigns ... (Score:5, Funny)
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95% (Score:5, Informative)
" looks like the end is near for SCO, which still owes Novell 95 percent of the SVRX UNIX royalties it collected from Microsoft and Sun through the SCOsource program."
Actually, the deal was that SCO remits 100% to Novell, then Novell pays them a 5% commission. Kimball ruled that SCO broke their fiduciary duty to Novell; SCO is no longer able to claim the 5% commission.
The only question left is how much of the Sun and Microsoft licenses were for Novell's stuff?
It's not over yet... (Score:4, Funny)
microsoft trial balloon (Score:4, Interesting)
A) Pump and Dump SCO stock
B) A Microsoft Trial Balloon
The pump and dump worked pretty well. A bunch of SCO execs sold stock and made money at the expense of the future of the company Microsoft funded part of this lawsuit to harass linux users and see what would happen if they started suing linux users and distros as well.
You'll notice they won't even tell you which patents of theirs linux infringes now. SCO got bad PR instead of them and IBM got good PR for defending linux.
Re:microsoft trial balloon (Score:5, Insightful)
No, they won't tell, and they most likely never will unless they get in a SCO-like situation where their actual revenue stream is drying up fast and it's either sue-and-pray or just die quietly.
I believe this is the primary lesson MS learned from their SCO experiment: The implication of IP infringement is much more effective at scaring people away from Linux than actually trying to prove it. As long as the infringement is a non-specific threat with only a hint of reality behind it, it works on the basic fear-centers of the brains of IT management. As soon as it becomes something real, like a lawsuit, then it instead it invites the managers to use the analytic portions of their brains. FUD and fact checking don't go together.
The concept of FUD is really nothing new to Microsoft of course, but this was an actual test run of "can we scare more people away from Linux with an actual IP lawsuit instead of just claiming that it is unsafe?" and it turns out the answer is "no".
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How much of Microsoft/SUN is SVRX? (Score:4, Informative)
Buy at 50 cents? (Score:4, Interesting)
Re:Buy at 50 cents? (Score:5, Funny)
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The Financial Situation For SCO (Score:5, Informative)
The ruling on the Microsoft/Sun royalties owed to Novell adds roughly $25 million to the liabilities, making SCO worth roughly -18 million dollars, book value.
translation (Score:4, Funny)
We are fucked, and are desperating trying to think of something to save our selfs.
What's going to happen - according to AllParadox (Score:5, Informative)
Based on the misery that is in store for them personally, Darl, Yarro and the lawyers all have to figure out how to save their hides. They might be able to do that if they can point to any evidence that points at Microsoft. That would direct IBM's attention away from them and IBM might be grateful. Otherwise, they will probably lose all the ill-gotten gains they have accumulated so far.
I can't wait to see SCOX in spam (Score:5, Funny)
Sad in a way (Score:5, Interesting)
I started my career as a technical support engineer for SCO Xenix in the late 80s, back in the time where Larry Michaels was there. They had the vision and an excellent code base. I had customers running up to 16 Wyse terminals on a 286 system under Xenix running COBOL applications, and even more could be achieved with SCO UNIX on the 386...
I know this is just a nostalgic thought and that the SCO I'm referring to has nothing to do with its current incarnation. I hope this can be used as a lesson for Canonical and other very successful ventures that can really become the next best thing: don't become arrogant and forget your values and where you came from. Companies change, but at the end of the day, it's all about the people and how you contribute to make your and our lives better.
Re:Die Hard (Score:4, Funny)
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Re:Darl? (Score:4, Interesting)
He made a lot of statements that could be taken as fraud. I wonder maybe IBM could send a package over the the SEC or the Justice Department...
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Re:They were a corp... (Score:5, Funny)
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Re:Darl? (Score:5, Insightful)
Nope. The crime is fraud.
-jcr
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Re:Darl? (Score:5, Insightful)
Sorry... I think you'll find the crimes and misdemeanors fall more under the following categories:
Libel
Slander
Stock Fraud
RICO
Breach of Contract
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Re:Darl? (Score:5, Informative)
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Re:Who invested is SCO anyways? (Score:5, Informative)
Mostly, it looks like large investment institutions hold the bulk of SCO shares. Probably these are part of "total market" indexes and mutual funds. Since SCOX is still listed, they would still be a component of such funds.
The best I can tell, the insiders are mostly gone. The largest holder of SCO seems to be Glenn J Krevlin. There are some articles out there linking him to some other bad smelling companies; the phrase "smoke & mirrors" seems common. SCO sounds right up his ally.
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Re:Who invested is SCO anyways? (Score:5, Informative)
Form 8-K for SCO GROUP INC
13-Aug-2007
Other Events
Item 8.01. Other Events.
The SCO Group, Inc. ("SCO", or the "Company"), offered the following statement in response to the August 10, 2007 ruling by U.S. District Court Judge Dale A. Kimball regarding the Company's longstanding dispute with Novell over ownership of the UNIX and UnixWare copyrights:
"We are clearly disappointed by the Court's adverse ruling regarding ownership of copyrights covering the UNIX operating system. Although the district judge ruled in Novell's favor on many important issues, the case has not yet been fully vetted by the legal system and we will continue to explore our options with respect to how we move forward from here.
We note that the court ruled that SCO owns the copyrights to the technology developed or derived by SCO after Novell transferred the assets to SCO in 1995. This includes the new development of all subsequent versions of UnixWare up through the most current release of UnixWare 7.1.4 and substantial portions of SCO UnixWare Gemini 64. We also own the exclusive, worldwide license to use the UnixWare trademark, now owned by The Open Group. Also, SCO's ownership of OpenServer and its Mobile Server platforms was not challenged and remains intact. These SCO platforms continue to drive enterprises large and small, and our rapidly developing mobile business is being well received in the marketplace.
Moreover, the court did not dismiss our claims against Novell regarding the non-compete provisions of the 1995 Technology License Agreement relating to Novell's distribution of Linux to the extent implicated by the technology developed by SCO after 1995. Those issues remain to be litigated." Forward-Looking Statements:
The statements contained in this press release, including but not limited to statements regarding the Company's pending litigation and expectations concerning the Company's developing mobile business OpenServer and Mobile Server platforms and other statements that are not historical facts, are forward-looking statements and are made under the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements are based on management's current expectations and are subject to risks and uncertainties. We wish to advise readers that a number of important factors could cause actual results to differ materially from historical results or those anticipated in such forward-looking statements. These factors include, but are not limited to, developments in the Company's litigation with Novell and IBM, continued competitive pressure on the Company's operating system products, which could impact the Company's results of operations, adverse developments in and increased or unforeseen legal costs related to the Company's litigation, the inability to devote sufficient resources to the development and marketing of the Company's products, including the Me Inc. mobile services and development platform, and the possibility that companies with whom the Company has formed partnerships will decide to terminate, or reduce the resources devoted to, their partnership with the Company. These and other factors that could cause actual results to differ materially from those anticipated are discussed in more detail in the Company's periodic and current filings with the Securities and Exchange Commission, including the Company's Form 10-K for the fiscal year ended October 31, 2006 and Form 10-Q for the fiscal quarter ended April 30, 2007. These forward-looking statements speak only as of the date on which such statements are made, and the Company undertakes no obligation to update such statements to reflect events or circumstances arising after such date.
Basically saying don't leave yet we do own stuff that has value see we can even name it
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Re:Your Parents (Score:4, Funny)
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Re:SCO still in the running. (Score:4, Interesting)
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Re:SCO still in the running. (Score:5, Informative)
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