Investors Bailing On SCO Stock, SCOX Plummets 368
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."
Wow! (Score:5, Insightful)
Re:Wow! (Score:5, Insightful)
Who invested is SCO anyways? (Score:3, Insightful)
I would be really interested to see how many people, besides people that work for SCO, invested more that $10,000 in their stock. If you're dumb enough to invest in SCO how did you make money in the first place?
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.
Ah, how sweet it is. Now about that Microsoft... (Score:2, Insightful)
In one sense, I deny that it matters. Since I believe we are evolving towards more freedom, then the momentary ups and downs don't matter so much. Societies that have more freedom and democracy receive competitive advantages, and eventually they will prosper over the less free societies. However, it still saddens me greatly to observe Microsoft's fundamentally negative contributions to the long-term competitiveness of America. However, it makes me laugh to hear Gates complain about the slow rate of software evolution when his own Microsoft is the biggest single obstacle to *REAL* innovation and change.
However, at least the obstacle called SCO has been removed. Worth a bit of a celebration. This tool is used up.
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.
Comment removed (Score:3, Insightful)
Re:Someone bought those shares today. (Score:5, Insightful)
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.
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.
No. They just believed there was money to be made (Score:3, Insightful)
Re:Buy at 50 cents? (Score:3, Insightful)
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".
Comment removed (Score:5, Insightful)
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
Re:Woohoo (Score:0, Insightful)
Two points I'd like to make (Score:3, Insightful)
Re:Someone bought those shares today. (Score:3, Insightful)
Re:Darl? (Score:3, Insightful)
Re:Someone bought those shares today. (Score:1, Insightful)
I have not analyzed SCO at all besides a quick look at this page, http://finance.yahoo.com/q/ks?s=SCOX [yahoo.com] but they did bring in ~27 million dollars in revenue last year, they apparently have ~8 million in cash on hand.
It was not that long ago that they were a player in the Unix market, and they probably have a significant number of customers who are locked in or happy with the SCO platform, even if not with its lawsuit happy CEO.
At a first glance, this stock looks attractive at 44 cents- Right now their market cap is about ~9.5 million. Before buying though, I would have to study what their debt load is (IE if their legal bills are already paid). If Darl stepped down and the company announced that it was going to go back to a business model of selling software, not suing people, I am pretty confident the stock would rise considerably.
Re:Maybe its not the end. (Score:4, Insightful)
Re:Victory! (Score:3, Insightful)
Just like SCO's claims were baseless, so would Novell's be, copyrights or no copyrights. Even if SCO were to have been found to own the copyrights, they would have lost. Both companies licensed any copyrighted Unix code contained in Linux under the GPL, and both have now done so for years (so neither company could argue it was an accidental limited release...both companies have based in the past (SCO) or are basing (Novell) their freakin businesses on Linux). Also, SCO was only ever able to demonstrate 300 lines of code, mostly header files and stuff that is in the public domain. And even if that stuff wasn't in the public domain, SCO and Novell entered into no less than 5 license agreements over said code with IBM and others that explicitly waived any rights to royalties and explicitly permit the redistribution of the code under ANY license. This was done through numerous standards bodies that both Novell and SCO took part in (such as the body that set Linux's ELF format as the standard binary format for all x86 Unixes). And last but not least, said code was also included in the ancient Unix release that Caldera released under the BSD license about a year before they became SCO, which Novell not only never objected to, but actually pointed to in court documents as a defense.
If you don't believe me, I'd be more than happy to find all of the documents and post links for you. Or, even better, go to Groklaw and read IBM's motion for Summary Judgment on its Declaratory Judgment of Non-infringement.
So yeah, your statement that the future of Linux rests with Novell seems pretty stupid now doesn't it? About all Novell would accomplish is ending up like SCO.
Re:Step functions (Score:3, Insightful)
Can anyone with more knowledge of sharemarkets criticize this analysis?
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.
Re:Someone bought those shares today. (Score:3, Insightful)
dk's final thought: meh not worth it.
Re:Woohoo (Score:4, Insightful)
Right now SCOX is so volatile the spammers can't even play their timing games with it. I actually expect them to suspend trading in the shares, probably before the market opens on Tuesday--and pending the bankruptcy filing. The question now is whether they can scrape up any basis for a Chapter 7 filing verses ol' Chapter 11.
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.
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.