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SCO Claims $15,300,000 From SCOsource

Posted by ryuzaki0 on from the dry-understatement dept.

Hollins writes "Yesterday, SCO filed their latest 10-Q. In it, they claim over fifteen million dollars in revenue from their SCOsource initiative (mostly from Microsoft and Sun) with a decline in revenue from all other sources. A lot of interesting statements are in the 10-Q, including "The success of our SCOsource licensing initiative, at least initially, will depend to a great extent on the perceived strength of our intellectual property and contractual claims and our willingness to enforce our rights. Many, particularly those in the open source community, dispute the allegations of infringement that we have made"."

40 of 404 comments (clear)

  1. Slashdotted! by darnok · · Score: 3, Interesting

    Surprise, surprise, ...

    Does it mention in any more detail how this licence revenue has come in? Aside from MS and Sun, who else has paid up?

    I'm particularly interested in the number of people who've signed up for the $699 "bargain rate" for Linux licences

    1. Re:Slashdotted! by MuParadigm · · Score: 5, Interesting

      They run into three problems if they actually try to send out those invoices.

      A) The obvious fraud charge that everyone has already discussed.

      B) Anyone who receives one of those invoices might try to challenge SCO's copyrights. Given that the presiding judge ruled ATT was "unlikely" to prevail on their copyright claims in the BSD case, SCO does not want to put their copyrights to the test in court.

      C) Anyone receiving one of those invoices might ask for declaratory judgement, requiring SCO to shut up.

      It's less a dog and pony show than a strip tease. And I really *don't* want to imagine Darl naked.

    2. Re:Slashdotted! by MuParadigm · · Score: 2, Interesting

      "32V is public domain, so their copyright bag isn't totally empty, but it's pretty damn bare."

      I was going to argue this, but then I realized what an excellent example it makes for "how public domain happens".

      For instance, my first thought was, 32V isn't public domain, yet. It's still under copyright until a judge or the copyright holder declares it public domain, or until it's something like over 50 years old or the author dies.

      But then I thought, Wait, I don't *know* that ATT never put 32V under public domain. Or Novell. Hell, it's possible.

      This code has been viewed by so many people and licensed under so many conditions, that the provenance of any particular code portion is a tangled mess, and the ability to defend the copyright is severely compromised by the inability to show where any portion actually originated.

      When a judge hears a plaintiff and a defendant argue over a piece of code, this is what he hears (apologies in advance to Gary Larson):

      Plaintiff: blah, blah, blah, but we wrote it first, blah blah blah

      Defendant: blah, blah, blah, no, you copied the implementation from here, blah, blah, blah

      Plaintiff: blah, blah, blah, and that was based on something else we did first, blah, blah, blah

      Defendant: blah, blah, blah, we did it first here, blah, blah, blah

      Plaintiff: blah, blah, blah, no, we did, blah, blah, blah

      Defendant: blah, blah, blah, did not, blah, blah, blah

      Plaintiff: blah, blah, blah, did so, blah, blah, blah

      Defendant: blah, blah, blah, did not, blah, blah, blah

      Plaintiff: blah, blah, blah, did so, blah, blah, blah

      At which point the judge decides, ok, this point is moot, I'll decide the issues on the other merits.

      But, then, if the judge has to hear this argument 10, 20, 100, 1000, 3000, times -- as SCO is threatening to put upon Judge Kimball with their "million lines of infinging code" argument -- then the judge throws up his hands and says, "That's it. Public Domain. No more of this. It's driving me up a fucking wall, and, you, Plaintiff, have clearly not been properly enforcing your copyrights or doing the due diligence to track them in a manner to prove your ownership before the court."

      There are other routes to Public Domain, of course. But this is the one SCO is preparing to trod. Idiots.

  2. So what they are saying... by Zocalo · · Score: 3, Interesting

    ...is that if they lose their court case with IBM and people won't buy their licenses, then they are screwed? Great! Let's go to court!

    --
    UNIX? They're not even circumcised! Savages!
  3. hoo boy... by focitrixilous+P · · Score: 3, Interesting

    While our SCOsource initiative has already resulted in revenue of $15,530,000 during the last two quarters and we continue negotiations with other industry participants that we believe may lead to additional SCOsource license agreements, we are currently unable to predict the level or timing of future revenue from this source, if any.
    Allow me a guess.

    Zero. Microsoft might keep you afloat for now, but you are doomed to failure.

    --
    SAILING MISHAP
  4. Truth in Reporting by ScottSpeaks! · · Score: 2, Interesting
    "Many, particularly those in the open source community, dispute the allegations of infringement that we have made"

    One of the lovely aspects of government-mandated reports is that they're required to acknowledge the negative side of things, forcing the company to state the obvious truth - rather than the company line - from time to time.

  5. burned by their own lawsuit ? by gmack · · Score: 4, Interesting

    "caused by the worldwide economic slowdown, increased competition from other alternate operating platforms, and uncertainty from our recent Linux announcement. This impact was largely felt in our distribution channel in the Americas and Europe."

    That's interesting.. it indicates at least some customers have given that lawsuit as the reason for not using their products.

  6. Sun is involved! by raahul_da_man · · Score: 4, Interesting

    Sun has paid Sco a quarter million. Why on Earth is it helping bankroll an attempt to destroy Free Software?

    It's time to boycott Sun. It's about time it learned you can't bite the hand that feeeds you.

    Microsoft, of course, is no surprise. I'm slightly amazed they didn't give Sco more money.

    1. Re:Sun is involved! by cyril3 · · Score: 3, Interesting

      Perhaps they paid for IP that SCO does in fact own. It may not relate to disputed Linux related IP. SCO does have other UNIX software that it has IP rights in and that it can licence, doesn't it? (That is a question ,by the way, not a statement)

    2. Re:Sun is involved! by LiquidCoooled · · Score: 3, Interesting

      Sun paid a little more, AND microsoft ARE giving them more money:

      The license agreement with Sun provides for an additional $2,500,000 to be paid to us by November 2003. On July 31, 2003, Microsoft exercised an option to acquire expanded licensing rights. Upon delivery, we expect to recognize additional revenue related to this option.

      --
      liqbase :: faster than paper
  7. Re:Not MOSTLY from Microsoft and Sun... by grub · · Score: 2, Interesting


    Right, meaning that all their income is from those two firms during the last two quarters. Ergo, they have no other customers.

    --
    Trolling is a art,
  8. Re:Two companies by Greyfox · · Score: 5, Interesting
    Sun's been making noises about being able to distribute the Linux kernel irrespective of the outcome of the IBM/SCO battle, if I read the news right. I assume it's to their advantage to imply that they're the only legal Linux distributor for as long as they can, so it'd be to their detriment for SCO to go bankrupt too soon. Once SCO goes under, they'll be back to having to compete head-to-head with IBM.

    They're taking a big risk of alienating the community that way. Personally I wouldn't play my cards that way given that a hefty hunk of the product offering (Mad hatter et al) coming up is open source based.

    --

    I'm trying to teach myself to set people on fire with my mind... Is it hot in here?

  9. Business Model? by Professor_Quail · · Score: 4, Interesting

    Regardless of whether or not their claim regarding the Linux source code is true, what kind of a business are they planning to run in the future? At this point, their 'other' revenues are dropping, so I wonder if they just plan to sit around and threaten people so they can collect royalties.

    If they're earning revenue in any other meaningful way, it'd like to hear it.

    1. Re:Business Model? by MuParadigm · · Score: 4, Interesting

      I posted this in a previous SCO thread, but I'm reposting it here, because it's the best answer I can think of to explain SCO's "business model"

      What Does Darl Get Out Of It?

      Darl gets a big fat payoff if he can deliver four straight profitable quarters. Most of it is in stock, which means he'll have to keep up the fiasco for extra quarter or two to cash out.

      At that point, I think we can expect him to leave SCO -- if there is any SCO left to leave. Maybe the final legal showdown will be Darl v. Ralph, to be filed in late 2004 or early 2005. We all know how much Darl loves to sue his employers.

      Anyway, this means the SCO v. IBM case is not likely to ever make it to court because there's *no* motivation for Darl to go that far.

      In the meantime, he'll do whatever it takes to show profit on the next two or three 10-Q's. He'll slash personnel, support, anything, doesn't matter how it affects SCO's long term prospects, as long as he shows profits each quarter.

      He'll try to get people to pay for SCO IP in Linux licenses NOW, not after the case is resolved in court, because he doesn't care what happens that far down the line.

      He needs the money on the books and in the 10-Q next quarter and the following quarter. He's got two profitable quarters in a row now, though he probably wouldn't have made it this quarter without cutting personnel and associated costs. Two more to go, and he's golden.

      If he hasn't done it already, we can expect some *extremely* creative accounting over the next two quarters. Personally, I think that asset listed as "Goodwill" is just the start of SCO's attempts at creative accounting. Or maybe more money from MS. MS, according to the latest 10-Q (available at SEC), has apparently purchased those "expanded licensing options" that were mentioned in the April 30 10-Q.

      Darl's biggest fear is that something will shut down SCO and/or it's FUD machine within the next two-three quarters. If he sounds irrational and afraid, well, that's because he is. He can't pull any more profits out of Germany. Australia, Austria, and Poland are lining up to gag him in their countries. Red Hat's trying to do the same in the U.S. Of course, none of this matters much as long as no court decisions are reached within the next 3 quarters. Which means delay, delay, and delay will be SCO's legal strategy going forward.

  10. Microsofts use of UNIX code by gazoombo · · Score: 3, Interesting

    What i find interesting is that Microsoft claims that it's OS is far better than the UNIX variants around today (Linux in particular) , yet they will still pay large sums of money for UNIX source to use in their Services For UNIX (SFU). Seems like they want all their bases covered.

    --
    John Hancock
    1. Re:Microsofts use of UNIX code by Anonymous Coward · · Score: 1, Interesting

      thats cause it's bad bussness to completely shut out a systems today. they have to be atlest a little compattable with unix otherwise there customers will go elsewhere.

  11. Sun got more than that... by Googol · · Score: 2, Interesting


    They got 210,000 stock warrants, now worth about $3 mil, but only carried on the SCO books as $500,000. Is it really income if its equity?

  12. SCO Employees on Slashdot? by The_Bad_Bob · · Score: 2, Interesting

    I always wanted to hear the other side to to hear the other side of this whole SCO story, and I just have one question. Are there any SCO Employees on Slashdot? What are your opinions?

  13. Re:of course by Tuqui · · Score: 3, Interesting

    I put it in another thread but your comment fall just in the point.
    It looks that M$ is using their money not only directly in fiaSCO contracts. You can see what is happening with SCOX stock too here

  14. 12 months of cash flow by Hamfist · · Score: 5, Interesting

    It also says that they have only about 12 months of cash left at the rate they're losing money. That means if they don't get more money from licensing, they will be broke before the IBM case comes to trial. If someone else sues them, they'll probably go under even sooner.

    I sure hope someone else sues them soon.

  15. Re:Not MOSTLY from Microsoft and Sun... by _Sprocket_ · · Score: 5, Interesting


    Are y'all sure that Sun did give SCO $$$ recently ?

    Usually the glib responce is "RTFA" - in this case its RTF10K. To quote:

    We initiated the SCOsource effort to review the status of these existing 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 Sun Microsystems, Inc. ("Sun"), a long-time licensee of the UNIX source code and a major participant in the UNIX industry, and was a "clean-up" license to cover items that were outside the scope of Sun's initial UNIX license.

    ...

    The license agreement with Sun provides for an additional $2,500,000 to be paid to us by November 2003.

    ...

    In connection with the payment of $2,500,000 to us by Sun during the quarter ended July 31, 2003, we granted a warrant to Sun to purchase up to 12,500 shares of our common stock, for a period of five years, at a price of $1.83 per share. This warrant was valued at $150,000 using the Black-Scholes option-pricing model and reduced our licensing revenue for the quarter ended July 31, 2003 by that amount.

    The other licensee mentioned was Microsoft. There's your proof that the mystery license went to Sun. Unless, of course, you believe SCO lied in their filing.
  16. Linux is HOT. SCO is NOT. by Futurepower(R) · · Score: 3, Interesting

    Microsoft says Linux is hot: Get the Tools You Need to Compete with Linux

    Microsoft is selling the CD: "Cost of CD is U.S. $3.50, plus shipping and handling."

    Does this mean there should be a Linux "How to compete with Windows" CD, that you can download for free? I can see it now:
    1. Don't pay Microsoft to be aggressive toward you.
    2. Use Linux and don't worry about changes in the license agreement as part of a bug fix, after you have paid for the product.
    3. No forced upgrades: Microsoft Bars Office 11 From Windows 9X
    4. Using Linux and Open Office means never having a software funeral.
    The fact that there is no "How to compete with SCO" CD available from Microsoft speaks loudly and clearly.
  17. Revenue != Cash received for products or services. by rice_burners_suck · · Score: 3, Interesting
    Don't forget something important: A large portion of these 15 million dollars in revenue is money that SCO never earned and will never get. That's because of the way accrual-based accounting works: Invoices written by SCO are considered Revenue in SCO's books and financial statements.

    Remember when SCO sent out zillions of invoices for $699 per copy of Linux? I believe that they don't actually expect to get paid for these invoices. They sent them out to increase their revenue, making their company look more successful, and when they won't get paid, they'll write it off on their federal taxes as "bad debts." It'll be years before this gets to court. In the meantime, showing revenue makes SCO LOOK successful, increasing their stock price.

  18. License for Concurrent Run-Time Use of Linux by Buddha+Joe · · Score: 2, Interesting

    .

    Didn't they claim to have already sold some Linux Licenses not to long ago to a comapny who couldn't be named due to confidentiality provisions? (Fortune 500 Licensee Acquires SCO UNIX License for Concurrent Run-Time Use of Linux)

    In this report they claim that the only Licenses they sold were to MS and Sun... and they weren't for Linux.

    I would think that they would love to point out to investors that someone had actually taken the bait. This omission only leads me to assume that this earlier press release was false. Like I sould be surprised.
  19. Some interesting statements ... by richg74 · · Score: 3, Interesting
    The first, in case anyone is still in doubt about who is bankrolling the SCO FUD machine:

    During the three months ended July 31, 2003, Microsoft Corporation ("Microsoft") accounted for approximately 25 percent of total revenue and Sun Microsystems, Inc. ('Sun") accounted for approximately 12 percent of total revenue. During the nine months ended July 31, 2003, Microsoft accounted for approximately 16 percent of total revenue and Sun accounted for approximately 12 percent, of total revenue.

    The second is, on the basis of the evidence I've seen, highly questionable:

    As a result of our assertion of our intellectual property rights, we have been subjected to several denial of service attacks on our website which prevented web users from accessing our website and doing business with us for a period of time.

    I guess it's that good ol' DoS attack that only happens outside office hours and on weekends in Utah.

    Finally, there is this little gem, which I find intriguing:

    During the quarter ended July 31, 2003, the Company issued a warrant to a consultant, as part of an agreement to assist the Company with its SCOsource licensing initiative. The warrant allows the consultant to acquire 25,000 shares of the Company's common stock at an exercise price of $8.50 per share for a term of two years from the date of the agreement.

    Anyone care to venture a guess as to the identity of the unnamed "consultant"?

    Rich
    SCO delenda est.

  20. Re:Two companies by ckd · · Score: 4, Interesting
    why Sun?

    Anti-AIX propaganda? They were sending out FUD emails to (among other people) a friend of mine saying "hey, we'll help you switch from AIX to Solaris, since we don't have any licensing problems"....

  21. Re:Stock Prices by msaavedra · · Score: 2, Interesting

    It's worth noting that according to finance.yahoo.com, which you cite, the only analyst they mention has SCOX rated a strong sell. I've seen several other analyst opinions as well, and without exception they rate SCOX a poor buy, usually using phrases like "will significantly underperform the market" and "no long term prospects". So obviously the smart folks know what is going on. Apparently, the stock is being driven up by speculators, who are almost certainly going to get burned. I guess these people didn't learn anything from the tech bubble bursting. The fools and their money will soon be parted; its a shame that it will probably end up lining the pockets of SCO execs, though.

    --
    "Any fool can make a rule, and any fool will mind it."
    --Henry David Thoreau
  22. Re:Balance Sheet Games by The_Dougster · · Score: 2, Interesting
    Who has been getting the shares?

    I wouldn't be suprised if SCO's stock price is overinflated due to short-selling. I'll be the first to admit that I have a rather limited knowledge of Wall Street finance, but there is a huge demand for the stock because everybody wants to sell short, wouldn't this make the price spike temporarily before it implodes?


    Probably just wishfull thinking on my part. SCO gives the phrase "flogging a dead horse" a whole new world of meaning. It must be some kind of mutant zombie robot horse like something from Quake2, and no doubt they are using the Super Cattle Prod, like from Fallout, to flog it. Makes me think of the Grinch when he was whipping his dog Max to drag that big overloaded sleigh up that mountain.

    --
    Clickety Click ...
  23. Re:Two companies by zerocool^ · · Score: 5, Interesting

    I just looked at it.

    Though I have no love for solaris, and I like budget options, I always defend sun hardware. Probably because I work on it on a daily basis (we use everything from IPC's to our quad proc ultra II at Netmar).

    The hardware is rock solid. I mean, you have to beat them with hammers to break them. The PROMS die before anything else goes bad, and that's just cause of the battery. And when the prom dies? Just boot it and make it set it's own mac address in the OS. The fact that we still use IPC's (as monitoring servers, rstat graph displayers, etc) is a testiment to how long they last.

    I just looked at the sun website. The machine you offer does indeed cost $40k, or close to it ($35k). However, make sure you see what's included in that. It's 4x Ultra SPARC III Cu 1.05 Ghz processors, EACH with 8MB of cache. On top of that, there's 32 256MB sticks of registered memory, 2 10k RPM 73GB discs, 2 Gigabit ethernet ports, and dual 1440 Watt power supplies. That's a beast of a machine.

    Oh, and wait, what's this?

    I configure a machine almost matching the specs. The difference here is the processors, which are 2.8 Ghz Xeons, but ONLY 2MB OF CACHE, and they're also only 32bit. Otherwise, the same. 8GB of ram, 2 10k rpm 73GB SCSI drives. Guess what? It cost $28,000.

    Between $28,000 for 32 bit procs with 2MB of cache, and $35,000 for 64 bit procs with 8MB of cache, I might go ahead and bump it up.

    I wish people would realize that sun is rock solid hardware and not that much more expensive.

    ~Will

    --
    sig?
  24. Re:Not MOSTLY from Microsoft and Sun... by Panoramix · · Score: 2, Interesting

    Wait a minute. So the only two "SCO source" licensees are Microsoft and Sun, and there's proof in this "10Q" document (slashdotted already, but I believe you). Now Microsoft, IIRC, paid for some "IP" for their UNIX compatibility thing for NT. And we're told here that Sun bought a "'clean-up' license to cover items that were outside the scope of Sun's initial UNIX license".

    Well that's all nice and good, except that neither of those licenses seem to be Linux-related, and I vividly recall Sontag bragging about how they actually sold a Linux license to some mystery "Fortune 500 company":

    "This Fortune 500 company recognizes the importance of paying for SCO's intellectual property that is found in Linux, and (they) can now run Linux in their environment under a legitimate license from SCO," Chris Sontag, head of the company's SCOsource effort to extract more revenue from its Unix intellectual property, said in a statement.

    Shouldn't they had to disclose that sale too in this "10Q" filing? But it wasn't Microsoft, it wasn't Sun, and they didn't sold anything else. So what's going on here? Could it be that... oh no... that SCO... either then or now... lied?

  25. Re:Two companies by mec · · Score: 3, Interesting

    As you said -- and, more importantly, as the 10-Q for the quarter plus the 10-Q for laster quarter said -- Sun gets options to purchase 2% of SCO. That's more than a cleanup license. That is a strategic investment.

    Sun is helping desktop Linux a lot, specifically through Open Office. Sun is also attacking server Linux via its partnership with SCO. Sun is a Linux ally in cases where Linux competes with Sun's competitors, and a Linux foe in situations where Linux competes with Sun.

  26. 10-Q covers up to July 31 by mec · · Score: 2, Interesting

    The 10-Q covers the period of 2003-05-01 to 2003-07-31.

    The mystery "Fortune 500" company deal was announced on 2003-08-11. So that revenue will appear in the next 10-Q, for the quarter ended 2003-10-31, which will come out about 2003-12-17 or thereabouts.

    The next questions are: will SCO identify the F500 licensee by name in their 10-Q? And will SCO break down their revenue enough so that we can figure out how much that license cost? My predictions are: (a) probably not; and (b) likely, but not guaranteed.

    Of course if the SEC climbs up their ass they can make SCO disclose just about anything, either to the SEC or to the public. In last quarter's 10-Q, for the quarter ended April 30, SCO did not identify Sun by name. This quarter SCO makes a point of doing so. I'm speculating here, but my intuition suspects there was some pressure on SCO to disclose this.

    1. Re:10-Q covers up to July 31 by Panoramix · · Score: 2, Interesting

      I see.

      Yeah, it's fun to watch for, ahem, inaccuracies fed by SCO to the press, and is easy to believe they are less than honest. But it's wrong to just assume they are lying, and to say so, without evidence to support it. So I apologize. Thanks for pointing that out.

      It's probably just that this company infuriates me. I can't remember being so angry at a company. It has become really hard to maintain objectivity when dealing with these bozos.

  27. Re:Two companies by Monkelectric · · Score: 3, Interesting
    I wish people would realize that sun is rock solid hardware and not that much more expensive.

    I don't actually disagree with you :) Alot of people don't need rock solid though, and don't need to pay for it. At the university I worked at, we didn't need rock solid, but we could afford it. I'm not saying we ever bought a DELL server, we just threatened to to get Sun to lower their rediculous prices :) Negotiating with them always reminded me of the south park where cartman is selling fetuses, "oh jesus larry you're breaking my balls here." Sun tries to club you over the head with their *rediculous* list prices.

    Once after I negotiated a pretty good deal (104k for A fire V440 with 4 procs, 4 gigs of ram, 2.6 TB of storage, and a tape library), I told one of my coworkers how proud I was of myself for getting us almost 50% off the list, and he said the funniest thing I've ever heard, "You should have asked them to raise their prices so we could have gotten an even better discount."

    So anyways, I love suns, was a solaris admin for 2.5 years, and I dont really diasgree with you. Just saying the average business might not need all that horespower. In my entire time I had *one* sparc 10 give out that was ancient, other then that nare a hardware problem in 2.5 years.

    --

    Religion is a gateway psychosis. -- Dave Foley

  28. Re:Two companies by linux11 · · Score: 2, Interesting

    Our university sales rep stated it a little differently. She said that she was conserned that the university was "cheating itself" with Linux. But to show that Sun is serious about the "Open-Source thingy" that she would put our University on the fast track to getting the source code to Sun GridWare under a "popular OSS license" which she wasn't at liberty to disclose yet (summer of 2000). But the details of the license would be wrapped-up by Sun management by December 2000.

    Sun has proceeded to demostrate how it is NOT serious about the OSS thingy by never following through on that promise. The university still has not seen line one of source code from the vapor-OSS project known as Sun GridWare under popular OSS license. Maybe by this December (2003), the vapor annoucement from Sun was stop being a joke? Ha! I kid... I kid... of course it will still be a joke. Most promises from Sun sales are.

  29. Re:Two companies by Anonymous Coward · · Score: 1, Interesting

    ... and if you can find appropriate resellers, you can get a HELL of a lot of hardware for DIRT CHEAP. Like the two E6500s we just purchased. 30 CPUs (400MHz SPARC9/8MB cache), 30GB RAM and a few GBICs here and there.. 2.68GB/sec backplane.. dual PSUs.. for the paltry sum of 21.5K$USD each. No, they're not current but I'll put a 30 way with 30GB of ram against your four way with 8GB of RAM and see who hits the finish line first. ;-) .. and I'll be the one with the spare $13.5K left in my pocket.

    Even against the 9.6GB/sec backplane in a V440, the E6500 has 30 *built in* GBIC ports, 2 per board which don't traverse the backplane, giving it screaming I/O. Sure, it takes more juice to run (24A@220 vs. 4A@220V) and eats some floor space (2'x4' with additional 1' per side clearance vs. 5U), but hey, when you can parallelize a process across 30 CPUs vs. 4 CPUs, it's Game Over. (Please insert another $0.50 for another three plays) .. oh, and it *will* run Linux if Solaris isn't your cup of tea.

    -AC

  30. I don't think it is... Someone please correct me? by MickLinux · · Score: 2, Interesting

    I don't think it is a pump and dump. However, I posted something similar to this, asking for correction or confirmation on a previous SCO item, and never got an answer. So I'm going to post again. Anyone have details? Am I right or wrong?
    -----------

    (1) Microsoft funded the initial lawsuit by licensing SCO's code to no known purpose.
    (2) Almost nobody except for one trading firm is buying SCO stock. That one trading firm has in its board of director's Melinda Gates.
    (3) That one firm is buying up stock as fast as it can, and the rate of sale is determined by the options exercised by the management. That is, management is selling off stock *only* as fast as they create new stock.
    (4) Technically, this hurts the shareholders of the stock, by stripping them of percentage ownership, transferring the new percentage to the new buyers (Microsoft-directed trading company), and transferring the profits to SCO directors... but...
    (5) Aside from this Microsoft-directed Trading company, the only owners are SCO, so nobody will complain, and
    (6) The amount of money that the SCO directors are paid is a direct function of the price that they can hold, which has a lot to do with the ridiculous claims that they make.
    (7) SCO -- isn't that based in Nevada? If so, then their personal liability is almost nil for anything they do as a director of the company.

    In other words, this isn't a pump and dump scheme, if I am understanding this correctly. This is a legalized version of libel, being run by Microsoft.

    My only problem is that I'm not sure that I'm correct. Is there anyone in the know who can correct any of my impressions? Like Commander Data's maker, I'm often wrong, and well could be wrong here.

    --
    Correct Horse Battery Staple: 72 bits of entropy. Enter "Correct H" into google. When it generates the phrase, that's
  31. Re:I don't think it is... Someone please correct m by Zigg · · Score: 2, Interesting

    So I'm reading your post and it hits me...

    Microsoft wants to absorb SCO.

    Think about it. The stock options are the payoff for SCO's directors for going along with this thing. They test the PR waters by starting the whole IP action ahead of time.

    Meanwhile, the "trading firm" picks up shares of SCO whenever a director wants to sell it.

    Microsoft avoids an outright buyout which would, today, cause quite the PR backlash. But when they turn up as the owner of UNIX in a couple years, nobody's shocked...

  32. Re:Revenue != Cash received for products or servic by jazuki · · Score: 3, Interesting

    Actually this isn't quite true. Though IANAA (accountant), I seem to remember two rules:

    1. Revenue cannot be recognized unless it's earned
    2. Revenue cannot be recognized unless you're likelier than not to get paid

    Thus, unless SCO wants to get into really hot water really quickly, with the SEC, and with stockholders, they could not recognize the invoices as revenue. If a court says that they actually have rights on Linux, that's another story. But keep in mind that so far, they haven't asked a court to rule on that matter. Their suit so far is entirely about IBM's alleged Sys V contract violation.

  33. Re:why don't we do something they will understand by yeremein · · Score: 2, Interesting

    SCOX is already shorted to the hilt. This hasn't stopped the stock from sailing through the stratosphere (last seen in the range of $20/share) despite the company having no fundamentals. SCOX has a very small float--it's closely held. This means that insiders and friends of SCO can manipulate the price easily. Stay far far away from SCOX. It's too big a gamble, short or long.