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SCO Execs Dumping Stock
luigi6699 writes "According to the Salt Lake Tribune, 'SCO Group executives have sold about 119,000 shares of their company since it filed a lawsuit against IBM in March...' Their CFO started the $1.2 million sell-off just after the lawsuit."
Maybe the mainstream media is finally going to get a peek at what we've been talking about for months!
One really has to wonder - this is SO blatent, why is the SEC not in this up to their necks?
But this is slashdot. A slashdoter who didn't build his own computer is like a Jedi who didn't build his own lightsaber!
What does this say about SCO's belief in the lawsuit? McBribe was blathering on about how IBM's refusal to indemnify its customers showed what IBM thought of its case. How about the chiefs dumping all of their stock? Yeah that's a major confidence builder!
If brevity is the soul of wit, then how does one explain Twitter?
If this insider selling continues as an IBM vs. SCO trial were to draw closer, that would mean that SCOs own top brass don't think they much of a chance. Of course of SCO winds up going under, those same top brass will probably have questions asked of them for why they sold before IBM destroyed them (if it happens that way).
Benifit of the doubt though, insider selling does happen in companies to take profit, and if you look at SCO's 1 year preformance going from 95 cents to 16 dollars at it's recent peak (an increase of nearly 1,700%), you would see why it would seem intelligent to sell.
SecondPageMedia - Wha
...this isn't just insider trading: it's fraud pure and simple, and thus should be punished.
The difference between the two in my eyes is that insider trading charges can target people who have no control over the company's action. Case in point: Martha Stewart, who might have known that the stock was going to drop, but had no control over whether it did or not. Punishing someone for selling because of what they thought seems like an egregious violation of privacy and civil rights AND is incredibly hard to prove; but punishing someone for selling because they engage in the systematic dissemination of disinformation related to the enterprise for the express purpose of increasing their payout at the expense of other stockholders is perfectly justifiable. That, my friends, is fraud.
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There, I said it. Sure linux marches on and the company will be pounded by big blue--but they, by which I mean the owners, get the cash for the FUD and run off. Legal liability is borne by SCO, which files for bankruptcy protection.
There's a lot of gloating here today, but I think that the SCO execs got what they wanted, the lawyers got rich, and everyone else would have benifited from this never happening in the first place.
gg.
"The avalanche has already started. It is too late for the pebbles to vote."
that the company that bought their license yesterday is a little nervous right now.
Oh, grrow the fuck up. Learn to differentiate between humor (even tasteless) and something actually worth getting offended over. There's way too many whiny little crybabies getting offended by something someone said these days. Don't like it? Move along, and turn in your PC police badge at the exit. You don't have to find it amusing, but jeebus fucking christ, grow a damn skin.
Yes, but all of the 13.7 million outstanding shares were not held by the executives.
From further down the article:
Bench (the CFO) has sold 17,151 shares in three separate sales since March 10, reducing his holdings to 228,043 shares, according to the Washington Service and regulatory filings. Vice President Michael Wilson sold his entire stake of 12,000 shares between July 14 and July 18, the Washington Service said...
Also:
Before Bench's sale, SCO insiders had not sold shares in more than a year, according to the Washington Service, a firm that tracks insider transactions.
A suddent >5% sale gets noticed, but nobody can dispute that a 100% sale is significant to say the least. (Imagine if Billy-boy suddenly dumped 5% of his billion+ MS shares?)
My rights don't need management.
Hopefully the SEC will investigate. Definitely sounds like a pump and dump move to me.
7 November 2006: The day Americans realized corruption and incompetence weren't addressing 11 September 2001
According to the story, SCO burned through $14 million last fiscal year. They had $10 million in the bank in April. This is about 8 1/2 months worth of fuel. This is assuming that this year is the same as last in terms of revenue (probably going down) and expenses (probably going up). So 8 1/2 months from April puts them running on fumes in December. I doubt this saga will drag on for years.
As the government's lawyer, Boies won the case against Microsoft, and his cross-examination of Microsoft's witnesses was legendary. See here, for example. So, yes, he would be just the lawyer I'd want on my side. It's very unfortunate that he's on SCO's side in this case.
Insiders sell stocks all the time, but not at SCO Group apparently. According to the article, there hasn't been any activity for a year. Insider selling activity has increased since the law suite started.
actualy I thought it interesting that after SCO throwing a multi-billion dollar lawsuit at IBM, habitualy bad-mouthing or scare-mongering anything Linux, and harrassing RH's customers, that their stock value looked pretty un-effected.
Apocalypse Cancelled, Sorry, No Ticket Refunds
Well, really, when (if) RHAT or IBM scores the stays in their countersuits, RHAT is going to double in price... it is going to get alot of "Linux is Safe Technology(TM)" press.
What he was talking about was not risk management however. He had absolutely no intention of even holding SCO's stock. He wanted to make money by watching SCO's stock go into the toilet. God bless him for it too, I just think it's risky for the reasons above.
By the way, since we're quoting people, Warren Buffet, the biggest player in some of the biggest and most sucessful insurance companies in the world- and who knows a thing or two about risk management, called options "financial weapons of mass destruction" in his latest annual report and detailed his plans to get out of the options business as fast as he posibly can. Read all about it at BerkshireHathaway's website.
To highlight the problem, he has no idea how long it will take for him to even be able to get out of it. The way options are used for risk management has led to arrangements that are stupifyingly complex. It's kind of like this- would you trust a billion line program not to crash? Of course not because you would never, realistically speaking, be able to figure it all out.
Look at LTCM and Enrons adventures with options. They all thaught they were pretty smart too. Because options deal with hypothetical situations, valuing them is extremely difficult. You have many situtations in which people have widely differing valuations and this can cause chaos for accounting. Fancy formulas can only take you so far. The more complex things get, the more chances there are for things to break.
This is a man with as close to an impeccable record as it gets and he wouldn't lose any sleep if options were outlawed. Beware, because some very savy people look at options and see a great big steaming pile of financial risk.
Everyone shoudl put an option-driven perfect-storm-style financial meltdown on their list of possible 21st century catastrophies.