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More Criticism of SCO's Claims To UNIX
inc_x writes "GROKLAW has a
compelling analysis that shows that SCO's claims that it owns the UNIX operating system are not very truthful. The Open Group confirms this position: "Statements that SCO "owns the UNIX operating system" or has "licensed UNIX to XYZ", are clearly inaccurate and misleading." It seems that SCO finds it increasingly difficult to distinguish facts from fiction. Last week SCO claimed 'This IP battle is only one part of SCO's business and is an add-on component. The core of SCO's business is profitable,' not bothered by the fact that they had claimed the opposite in their SEC filing: 'If we do not receive SCOsource licensing revenue in future quarters and our revenue from the sale of our operating system platform products and services continues to decline, we will need to further reduce operating expenses in order to maintain profitability or generate positive cash flow.'"
who takes it seriously? We only read it for the entertainment value because we all know that their allegations would only hurt themselves. And they have proved that time and time again
Cash incentive for open source community from SCO? (Wednesday August 26, 1998 @07:45PM)
Who buys the stocks that SCO "dump"?
Read the Friday August 29th page of Groklaw. There's a company called Integral Capital Management V that's bought enough recently that they had to file a 13G with the SEC. Curiously, shortly after they bought a big interest in Drugstore.com no long ago, a person by the name of Melinda French Gates was appointed to a seat on that company's board or directors. Hmmmm....
Most on the yahoo forum have come to believe SCO has put someone up to buying stock to keep the price high. This allows them to continue to cut deals by offering the option to buy SCOX stock at a highly reduced price (stock options) in exchange for business favors (i.e. SUNW).
Besides >45% of the stock is held by insiders, and probably another 20%-30% is held by funds. its a VERY illiquid stock with small public holdings. Practically you could call it a private company.
And for those that think SCOX stock is or was a good buy because the price is so high need look no further than the liquidity of the stock. Todays price may be $16 but sell 100,000 shares on the market and the price will drop instantly $2. So if your tossing around 100-10,000 shares, you can probably make a little change. any more than that, and you wouldn't be able to effectively cash out reliably.
I had commented previously that it is like a cheap soap opera, but a good, cheap soap opera for nerds. It is a compelling story, with good guys and bad guys, and all kinds of plot twists, unusual characters, and viewpoints.
/. editors on the pacing as well. Its probably a good compromise to keep all parties in balance. Can't wait 'til tomorrow's episode ;)
Its not really a simple "SCO v IBM" situation, but a tangled legal mess that includes Open Group, SGI, Sun, OSX, BSD, MS, OSS, the GPL, RMS, and lots of other acronyms. You can't write fiction this good.
I would agree with your evaluation of
Tequila: It's not just for breakfast anymore!
Sorry if I seem cynical, but democracy only works if more than half the population makes intelligent decisions.
...just my 2 gil.
Link to an article I found which pretty much tells it like it is:= News&file=article&sid=410
http://madpenguin.org/modules.php?op=modload&name
These guys really need to get a grip. The whole world is laughing at them, and it's time they come clean with the code they claim they have. Torvalds stated that he would personally REMOVE/REPLACE the offending code IF it was found.... so what's the issue? $$$$$
In this article "SCO's next target: SGI?"h tml), we find this gem:
(http://zdnet.com.com/2100-1104_2-5072061.
In his August presentation, [SCO senior vice president Chris ] Sontag
said XFS in Linux includes 173 files and 119,130 lines of code that
infringe the company's intellectual property.
Oh reaaaaly?
Hm, how many lines are in Linux XFS?
[nobody@penguin xfs-kern-2.6.0]$ find . -name \*.[c,h] | xargs wc --lines
133482 total
Yay! SGI still owns 14,352 lines I guess.
Wait, but they said lines of code... strip comments & blank lines:
[nobody@penguin xfs-kern-2.6.0]$ find . -name \*.[c,h] | xargs stripcmt | grep -v ^$ | wc --lines
92618
So, they claim to own 26,512 more lines of code in Linux XFS than -actually exist- in the codebase.
Isn't it funny that no one is able to even throw money at SCO for a "Linux License?" I emailed scoinfo@scosales.com and asked about these magical mystery linux licenses and got no answer but an offer to buy "SCO Unix" and threat to be billed for asking so many questions.
NO ONE has actually been sent an actual invoice; SCO has merely made threats in the press to do so.
I do not think they have any intention to actually send any real "invoices"; that would be fraud. They just want to make headlines and grab fast cash.
With the The Open Group, who even Darth McBribe ackowledges hold the trademrak to "UNIX", I do not know what wild claim is left for SCO to make. They will probably claim next that their IP claims to Unix trumps the Open Group's Unix trademark. Because of course, SCO claims always trump all other claims.
I am a former Microsoft guy who is in the process of converting to Open Source, and I will enjoy watching SCO die a horrible death at the hands of the Open Source/Free Software community.
Not many sensible investors looking for long-term profit would invest in SCO. But they aren't the only ones who buy stock. As an example, say some company or person wanted to reward the SCO execs for their litigious nonsense. This company could do so legally and largely unnoticeably by buying SCO stock. With the execs dumping stock which is really worthless, money is just going from the purchasers to the officers' pockets.
If, hypothetically, there were some large American monopolistic company, and let's further suppose that such a hypothetical company were willing to buy SCO stock at outrageously high prices to reward the investors, then I would observe two things. (1) they cannot buy more than 5% of SCO before having to file with the SEC as to their intentions. (2) they would lose the money they spent on the stock when it crashes.
If there were such a hypothetical company doing such a thing, then they would have to file with the SEC as to their intentions. I can just see the filing: Our intent is to make the SCO principals rich in exchange for restraining trade in the Linux market.
As for item 2, there are some American companies with enough money in the bank that they wouldn't even notice some few millions of dollars.
Maybe multiple companies in collusion could each buy under 5 % of the stock? Or maybe the SCO principals don't own more than 5 %? But then the other 95% holders would be yelling Sell! Sell! Sell! And someone must be buying at those prices, because that's what determines the prices.
(being that this is slashdot, I should have said "loose the money" instead of "lose the money".)
I'll see your senator, and I'll raise you two judges.
Yes, yes, this is the conspiracy theorist in me sure, but read this and make up your own mind.
" We initiated the SCOsource effort to review the status of these licensing and sublicensing agreements and to identify others in the industry that may be currently using our intellectual property without obtaining the necessary licenses. This effort resulted in the execution of two license agreements during the April 30, 2003 quarter. The first of these licenses was with a long-time licensee of the UNIX source code which is a major participant in the UNIX industry and was a "clean-up" license to cover items that were outside the scope of the initial license. The second license was to Microsoft Corporation ("Microsoft") and covers Microsoft's UNIX compatibility products, subject to certain specified limitations. These license agreements are typical of those we expect to enter into with developers, manufacturers, and distributors of operating systems in that they are non-exclusive, perpetual, royalty-free, paid up licenses to utilize the UNIX source code, including the right to sublicense that code.
The amount that we receive from any such licensee will generally depend on the license rights that the licensee previously held and the amount and level of our intellectual property the licensee desires to license. The two licensing agreements signed by us to date resulted in revenue of $8,250,000 during the quarter ended April 30, 2003, and provide for an aggregate of an additional $5,000,000 to be paid to us over the next three quarters. These contracts do not provide for any payments beyond 2003, except that Microsoft was granted the option to acquire expanded licensing rights, at its election, that would result in additional payments to us if exercised. In connection with the execution of the first license agreement, we granted a warrant to the licensee to purchase up to 210,000 shares of our common stock, for a period of five years, at a price of $1.83 per share. This warrant has been valued, using the Black-Scholes valuation method, at $500,000. Because the warrant was issued for no consideration, $500,000 of the license proceeds have been recorded as warrant outstanding and the license revenue associated with this arrangement has been reduced for the fair value of the warrant. "
Curiosity was framed; ignorance killed the cat. -- Author unknown
If you stop and check the listing of the Executives and the board of directors for Drugstore.com, you'll also see that the Chairman of the Board, Peter Neupert and at least one other board member worked for Microsoft before being hired on at Drugstore.com.
Going on that, you'd think that a man with an MBA from Dartmouth would have at least some kind of clue of what makes a good director. Hell, Stanger, the other director with MS ties got his MBA from Berkeley.
Aside from the fact that she happens to be married to the man most people on slashdot liken to the anti-christ, Ms. Gates has got cred of her own.
BA from Duke and an MBA from Duke, plus she sits on the board of Trustees at Duke.
Just because she married Bill doesn't immediately make this a freakin' conspiracy.
You want some what-if on SCOX? Okay.
First, forget about price per share. Look at the whole company. SCO is worth fuck-all for the OpenServer/UnixWare division, maybe $10 million to $20 million at most. The real action is in the IBM lawsuit and in the prospect of collecting butt-loads of Linux license fees.
The IBM lawsuit is worth, at most, $3 billion today. That is in the ludicrous event that IBM says "fuck it, we'll just pay the face amount of the suit". But that never happens. A more realistic bad scenario would be 10% or 20% of the face amount, or $300 million to $600 million. And SCO's lawyers take 30% (a guess) of that, so $200 million to $400 million left for SCO.
As for the Linux license fees, even if you postulate that SCO pulls some really amazing legal trick out of its ass, then you just know there will be a matching really amazing mass migration from Linux to *BSD shortly thereafter. SCO would be lucky to collect anything in the $10 million range for that.
So take $400 million, divide by the shares outstanding, 15 million shares, and you get $27 per share as the value of SCOX if SCO gets a high-end settlement from IBM.
Or look at it another way: at $100 per share, SCO would be worth $1.5 billion, which would be a ludicrous settlement from IBM (the leftovers from a $2 billion settlement after the lawyers take their contingency cut). If IBM was willing to settle for $2 billion they would have done so back when the face value of the suit was only $1 billion.
The thing about short positions is that when they go sour, they turn against your equity MUCH FASTER than sour long positions. You should be experienced at using stop-loss techniques before shorting a volatile stock like this, and you should have enough cushion to sustain a 100% loss.
Advice from an AC, worth whatever you believe it is worth.
Just because she married Bill doesn't immediately make this a freakin' conspiracy.
I agree. The world of high-tech is small and I'm willing to accept this as coincidence.
However, the fact that Microsoft wrote a check to SCO for $6 million does make this look like a conspiracy.
And the fact that Sun wrote a check to SCO, and Sun received an equity position in SCO, and Sun now loudly proclaims their products as legally compliant with SCO due to their 10-year old license -- but Sun does NOT talk about the license + stock warrant agreement they signed wit SCO in February 2003 -- looks even more like a conspiracy.
rufey typed- "If SCO is indeed considering sending Linux invoices to end users, be it commercial entites or the home user, how in the heck is SCO even going to obtain a list of Linux users? "
SCO doesn't really want to send invoices, because- despite the amount of illegal plant material that Darl and friends are smoking- they know they would be in deep sh*t if they sent a single invoice out.
I had a slow day last week, so I read SCO's website about Linux and the Linux IP license. On that page, they clearly threatened me, a commercial Linux user. So I called them, and spoke with a Customer care person. She was slightly flustered when I asked her about these invoices.
"I owe SCO money," I told her- so send me an invoice, let me examine it, and I will decide whether to pay up or tell you folks to piss off. The Customer care person told me that SCO was NOT sending out invoices at this time- they were only "taking credit card orders." I asked what gave- if you truly think that commercial Linux users are stealing SCO IP, why not invoice them? She took my name and number and said a SCO salesman would call back. One never did.
Interesting, for several reasons. First, SCO threatens me (as a commercial Linux user) on their website. But they won't send me an invoice- and here is why- that invoice would go directly to my state AG's office, and SCO would be in danger of further legal action. You can't make fraudulent claims like they have and try to sell stolen goods without the possibility of some legal action. Secondly, why are they "only taking credit card orders." Simple- if someone is actually stupid enough to give SCO a cc number, SCO can put whatever they want on that cc receipt, effectively protecting themselves from liability.
BTW- not being very afraid of SCO or their puppetmasters, I had sent SCO 2 e-mails in July asking to be invoiced if they thought that I owed them money for my Linux use. No invoice ever arrived. If one ever does, I'll frame it and see how much e-bay users are willing to pay for it .
The SCOX discussion board on MSN (hey I wanted to ask questions there) is now "not active."
I think M$ got tired of embarrassing questions being asked on a stock board.
Just another way for SCO/MS to control the flow of misinformation
Prior to 1997, the company currently known as The SCO Group never reported a profit. Here's information from your S-1 registration
Began operations in 1994
Year ended 1995-10-31 revenue $0, net income ($1,350,000)
Year ended 1996-10-31 revenue $1,108,000, net income ($2,757,000)
Year ended 1997-10-31 revenue $1,117,000, net income ($8,148,000)
Year ended 1998-10-31 revenue $1,057,000, net income ($7,963,000)
Year ended 1999-10-31 revenue $3,050,000, net income ($9,367,000)
So who exactly is this "we" you are talking about? Because "your" company, The SCO Group, has had no profit in its entire history, except for the profit from the SCO Source program.