Slashdot Mirror
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."
against setting company policy solely so you can cash in your stock for a good price and screw the rest of the stockholders who don't know better?
If I were a SCO shareholder and I saw the SCOX Chart, I would be dumping my stock too!
Yahoo 5 day chart: Can you spend a trend?
The SEC should really look into this. The lawsuit is totally bogus. SCO is definetely not acting in the best interests of its shareholders. SCO seems to be acting in the best interests of Microsoft. It is very curious how Microsoft and SCO reached some kind of licensing agreement in the context of this lawsuit. It is also curious how SCO claims that a single company purchased one of their bogus licenses without disclosing the name. There needs to be full disclosure about the relationship between SCO and Microsoft.
Uhh yea, its public knowledge. I been spouting off here for a while about that. Also you should see all the gloom and doom in their quarterly report. Nobody can accuse them of anything illegal as they are doing everything in the open...
We know they do not expect to win...
Matthew 6:21
"For where your treasure is, there will your heart be also."
"SCO spokesman Blake Stowell declined to comment on the share sales. The company will comment on the sales when it announces fiscal third-quarter results Thursday, he said."
Keep this date in mind. Then we can hear what their excuses are.
-- "Quidquid latine dictum sit, altum sonatur."
- Whatever is said in Latin sounds profound.
Pass a law making corporate execs unable to sell their shares when their company is taking part in nonsense suits like this! Captain should go down with the ship, RIGHT?!?!?!?!?
1) no evidence
2) asking for payment (extortion)
3) stock prices++
4) stock selling
Even she thinks something fishy is going on.
Christ, read the article for once! 119,000 shares were sold, out of 13.7 million outstanding shares. My admittedly hasty math puts that at less than 1% of the total shares. The other numbers involved were Robert Bench selling off a total of 17,151 out of his (then total) 245,194 shares. Again, rough math adds it up to less than 10%. Wow.
Any hopes Slashdot ever had of being a reputable news source... wait, they never had those hopes. News for fanatics, stuff that gets you riled up until you read the article and realize it's not what you thought but hey, buy our T-shirts anyways!
"The company will comment on the sales when it announces fiscal third-quarter results Thursday, he said."
If the results are bad, wouldn't it be insider trading? If they are good, why sell?
I want to see all their new shareholders (due to them thinking the lawsuit was real and buying more) shit themselves when the price plummets :-)
That would serve them right. Stocks should be bought and sold based on company worth and profitability.
It is unnacceptable for people to try to cash in on the legal system. It's almost un-american. I would feel sorry for those stock holders (some are probably legitamate), but I will feel no remorse when those vultures get what is coming to them.
Slashdot Syndrome: the sudden, extreme urge to correct someone in order to validate one's self.
It's class action attorneys, and not the SEC, that 'regulate' this behavior. The SEC can't have the resources to regulate every company in the U.S. but class action attorneys, because of the contingency fee structure, do have the resources to sue them.
Why do you think the corporations complain so much about class action lawyers? You don't hear them whining about the SEC.
I only say this because I always hear complaints about class action attorneys (which seems strange to me on Slashdot). They perform an essential, and very valuable public service. And yes, they make good money from it -- but only when they win.
If I go and buy a share or two of SCOX from one of the many rats fleeing their sinking ship, could I claim that my Linux installs would then be non-infringing since I would be a part owner of the company which "owns" the IP my 2.4.x kernel is supposedly copied from?
All the more reason to cruise on over to PinkFairies.Org and check out the SCO Code Bounty Hunt - Where we're putting money on the lack of SCO code in the kernel!
~Will
sig?
What is that Fortune 500 company smoking?
Well, they don't only make good money when they win. They generally make good money when they settle, which they seem to do at least 99% of the time. Much of the time they settle for less than what it would cost the sued company to adequately defend the lawsuit. That seems like a shakedown. You don't read about it in the paper, but this happens all the time.
The other problem with class action litigators is that they keep a huge chunk of whatever damages are collected, rather than giving it to the people damaged. This makes their winnings a de facto penalty, rather than a repayment of damages. Penalties should be imposed by and paid to the government, in my opinion, not by and to individuals. If the class action attorneys can make so much money (and some of them have made a *lot* of money) from penalties, why shouldn't the SEC be allowed to enforce laws and extract penalties? In effect you've outsourced justice to a bunch of unprincipled vigilantes. Not good.
Milo
I'd take a look at the trend in this linear SCOX Chart for better information.
********* sig: If you don't like the law, get filthy stinking rich, and buy a better one.
The controversy here is not SCO or Linux; it is IBM. It is IBM and the threat IBM poses to Microsoft. Microsoft is scared of Linux and open source, but the latter only became a threat when IBM began to push them. IBM and Microsoft go a long way back, and the dissolution of their partnership in the beginning of the 1990's was less than amicable according to at least one regretful Steve Ballmer.
Microsoft and SCO go a long way back too. Microsoft originally bought a Unix source code license so they could commission SCO to write PC Xenix for them. Microsoft long regarded SCO as a threat, but this was unrealistic, and it is possible the two companies have now made amends.
For wouldn't it be ironic if Bill Gates were behind the whole SCO debacle? I am not saying it is probable, only that it is possible. Knowing the Halloween Documents, knowing Bill Gates, it is easy to see that Microsoft would not stand still and let IBM with Linux walk all over them as is the case today.
From the article: The amount of short interest in the stock rose more than tenfold between May and July, according to Bloomberg data.
It seems that Slashdotters aren't the only ones who've been shorting SCO.
~==>RocketSHE
This was an interesting post over on Yahoo (concerning the dramatic rise in SCO share price in the closing minutes of trading):
"100 share lots, and the whole last 1o minutes (half the gain on the day) were done on less than 5000 shares. Thats less than 1/250th ( 0.4% - 4/10 of a percent) of the daily volume accounting for over HALF the closing price.
If you look at the whole runup at the end, less than 1% of the volume accounted for 80% of the closing price gain.
Someone is playing real monkey business with this stock.
I wish there was full disclosure with buying and selling like there is on political donations. It would be very interesting to see who it is that keeps manipulating the closing price."
That's Illegal.
Egad!
How many titles does the recurring "Broughton, Reginal C" have? I see "Employee", and "Senior Vice President" and "Senior Executive Vice President" and one unlabelled...among the 9 stock sales transactions listed since June 20....
P.S. any moderators out there who can spare a "+1 informative" for the parent post?....
Hacker Public Radio is our Friend
(1) When the Linux crowd proves they aren't using stolen SCO IP, the stock will fall apart, and these guys will face a shareholder's lawsuit and a serious investigation. Expect these guys to get the hell out of the country, fast.
OR:
(2) Linux actually *does* have SCO IP stuck in it, and these execs just want to bail out while the stock is high and before people realize that Linux will survive whether it has to pull some code out or not.
Actually, most of the sells were automatic. Ie, a threshold is set and when the stock gets there a certain amount get sold. Its one of the ways execs try to avoid insider trading.
"Thanks to the remote control I have the attention span of a gerbil."
The very next story in the business section of the SLTrib is also about SCO (click the blue right arrow at the bottom of the original article or click the link below):
8 3192.asp
http://www.sltrib.com/2003/Aug/08122003/business/
A solution to the problem with music today
First and foremost, it's a transfer of wealth from one shareholder group to another, plain and simple. Very rarely is that money paid by management as individuals; almost all of it comes out of the shareholders pockets. Put differently, you're punishing people who likely had no ability to influence the outcome of the alleged event, and may not even have been invested at that time. Even after an Enron has been "purged" of the guilty, who is going to invest in that company with all the risk associated with a shareholder lawsuit? You're compounding shareholder trouble. Second, many of these claims are dubious at best, but because of the technical nature of accounting and the typical jury pools lack of experience, the outcome is far from certain even when the managements innocence is well understood by the financial community. The result is that many companies settle because that one in 500 chance of a 1b dollar verdict is too much to handle. The lawyers can and do get rich without a single guilty verdict--I know of some particularly egregious cases from first hand experience.
Most of the SCO executives are still holding on to quite a bit of stock. They're going to have to pump it a few more times to get rid of it. Now the license announcement is causing slow recovery of the price but in real terms, the price has plateaued and more hammers are going to fall on them. SUSE has all but announced they're cooking up something nasty, Sony and other consumer electronics firms aren't going to want to pay for their bogus licenses. Last but not least, every kernel contributor is a bomb that could go off at any time. Some of them may even have money for ruinious countersuits of their own.
So what to do? They would have a hard time topping themselves in the outrageous statement department. I see at least four more pumping actions they can pull. They can loudly announce that they will "soon" be filing suit against large corporate users. When the price flattens out again, then they can actually file some of them. Then it's loud announcement time again. This time they'll bleat that individual users and small organizations are being sued. Then they can actually sue a few.
They're like a turd on the ground. Yeah, we'll be able to squash it but the smell will stick to our shoes for a loooong while.
Put options give you the right to sell the stock at a later date, but at, say, today's price. The only risk is the price of the put, wheras when you short stock you have arbitrary exposure if the stock goes up.
Also, it is probably easier to get approval from a broker to trade puts. Shorting stock basically means him lending you stock. Buying puts avoids that aspect of it.
they don't only make good money when they win. They generally make good money when they settle
... which leads to your next point:
Certainly -- I didn't mean to be so specific. Nobody ever wins or loses these cases in court, only at the settlement table. Settlements, for any case, are much preferred to trials and encouraged by our courts.
which they seem to do at least 99% of the time
Actually, it would be more accurate to say 99% of suits amount to nothing, and then the attorneys have invested many hours and dollars (for experts, research, etc.) and get zero return
they keep a huge chunk of whatever damages are collected, rather than giving it to the people damaged.
Because the attorneys get nothing from most cases, they need big wins. Note that the people damaged contribute nothing -- many are unware of the money and time the attorneys invest on their behalf -- and they take no risk. If the suit fails, the people damaged lose nothing and the attorneys lose everything.
Penalties should be imposed by and paid to the government, in my opinion, not by and to individuals. If the class action attorneys can make so much money (and some of them have made a *lot* of money) from penalties, why shouldn't the SEC be allowed to enforce laws and extract penalties?
An interesting point. On one hand, I agree: the SEC could theoretically finance itself better. On the other, you are removing from the class members (the people damaged) a fundemental right in a democracy: To sue people who harm you and get justice.
Unfortunately (and I mean that) it takes money to sue, so the only way it's practical to sue someone who has scammed $1,000 each from a million people is for the million people to sue as one big group. a class. They could pool their money and hire a lawyer not on a contingency basis (meaning the injured party pays the legal expenses but, if they win, keeps the winnings), but nobody seems to do it.
And a little more info on "insiders"
over here
No, trying to steal money from others is bad by misrepresenting the assets of your company to potential shareholders so that they will value your company more highly, so that you can sell to them and call out "sucker!!!" as you flee the scene is bad.
Don't pretend they're making an honest profit here because there's no way to interpret that from the facts.
Oh, and putting food on the table is only good if you can do it while not taking food off of the table of others (i.e. if you produce something, or otherwise add value to the system). In my humble opinion, anyway.
Regards,
Ross
Who do you dispise more?
1) SCO
2) RIAA
3) MPAA
4) MS
5) CN (Cowboy Neal)
We need a -1 dumbass and -1 stupid too.
Never confuse volume with power.
Hopefully the SEC will investigate. Definitely sounds like a pump and dump move to me.
$1.2 million worth among ALL the execs after a factor-of-ten jump? Peanuts. I'm surprised it isn't far more.
Even if they are darned sure they're going to win (and you NEVER know for sure with a court case), this looks like a bubble. It's much more likely to pop than keep rising. Even if it keeps going up the big inflation is probably over.
"Take the money and run." As I learned the hard way by NOT doing so before MY company took a factor-of-1,000 dive in the internet bubble-pop. Went from a paper multi-millionaire back to a multi-thousandaire - i.e. a working stiff with a mortgage - with enough still out on a credit card to just about cancel out my cash reserves. These guys have been through it before and it's hardly surprising if they want to lock in - or spend - some of their gain.
By the way: Looks like their war chest just got a $40 million boost from Computer Associates, who just caved on a suit SCO filed against them in 2001.
Bantam Dominique roosters crow a four-note song. Once you've heard it as "Happy BIRTHday" you can't NOT hear it that way
Wilson sold *all* his shares. From what I hear, he may be one of the pro-Linux guys at SCO. This may just be his attempt to cash out his options, Opinder Bawa - like, before getting the hell out of the company.
Well, but the fact of the matter is that if you short a stock and the stock price goes up instead, you lose that much money per share. However, If you buy a put option and the price never goes low enough to excercise it, it is worthless when the time period is up. It also has to fall more than the cost of the option in order for you to make money. You don't put your life savings in a put option. In its most basic form, it's a high-risk, high-reward all or nothing bet. Kind of like buying SCO's stock right now ;)
Personally, I'd avoid BOTH of them (in addtion to SCO's fscking stock). See, it isn't enough to be right, you also have to be right within a certain time period. With a normal long-buy, you can have a stock fall for years before finally going through the roof. Waiting until the tide turns your way is not a luxury you would have with these two. If you short a stock you can theoretically lose an infinite amount of money. If the stock more than doubles, not only have you lost your whole initial investment, but you are now in debt. It doesn't matter if the stock goes to $.01 a year from now, if the broker thinks you might not have the cash to return his stock if it goes up any more, he can ask for it back. You will be forced to buy back the stock at whatever price it happens to be at. You can have a perfect prediction long term and still be fscked. Thats why you never sell somebody else's stock.
Sound far-fetched? Imagine you baught SCO's stock at $.60 a while back (it's at $10 now). Sure, it's a shitty, two-bit company that's going to zero, and it probably sounded like a good idea at the time. But unfortunately, as we have seen, it isn't going to take a staight line there with this lawsuit bull and few people have pockets THAT deep. You would have almost certainly lost your shirt by now. Oh and by the way, you don't get unlimited profit potential like you get with a regular stock purchase either. For your unlimited loss risk you can expect to make absolutely no more than double.
Stay far far away from this stuff kids. Your plain old ordinary stock purchase offers endless profit potential, limited loss, and the ability hold on to the stock as long or as little as you want in order to get a good price. That's how the really rich get that way and stay that way, they find a good piece of a business and hold on. Shorts and Puts are not investments. Believe me, it's no harder to pick a good long stock than it is a short one. They're a gamble, and very very few people make money and actually keep it gambling. Sure, you can make tons of money, but only to have it all come tumbling down, Enron or LTCM style, some fateful day.