Slashdot Mirror
SCO gets $50 Million Investment
sjbe writes "It was announced today that SCO received $50 million in private equity funding. The lead investor is BayStar Capital which has invested in Roxio among other companies. This gives SCO a pretty big war chest to fight IBM. Before this investment SCO only had a few million in cash remaining. If you thought SCO was annoying before, this won't help."
This isn't enough money to pull them out of their revenue doldrums. It's just enough money to make them a huge pain in the ass. If it were $500 million we'd probably have *less* to worry about, because they might be able to actually pursue product-based revenue streams.
WARNING: there is a trojan on your
"LINDON, Utah, Oct. 16 /PRNewswire-FirstCall/ -- The SCO(R) Group (SCO) (Nasdaq: SCOX - News), the owner of the UNIX operating system, today announced it has received a $50 million private investment led by BayStar Capital, an investment fund that is a leader in providing negotiated private equity placements in publicly traded companies."
Was SCO ever legally determined to own Unix? I can't keep track of the things that SCO claims to legally own anymore.
Think how many starving children you could feed for $50 million... or how much cancer research you could fund. I mean seriously, they couldn't think of anything better to do with their money than give it to SCO?
Rank Presidents by th
"private equity funding"?? Does anybody else think this deal smells? These guys are just a front for some private investors, i.e. they supposedly solicited the the investment from some third parties after putting together the package for an equity purchase in SCO. I wonder who those third parties are? Well you'll never know because it's a private placement. This is just a device for concealing who is really behind the funding. If your ever able to dig down through the byzantine structure of corporate, partnership and limited partnership entities that are the private investors, I think you know who you'll find at the bottom of the heap; those who have an interest in seeing this litigation continue regardless of its outcome.
Well, considering that SCO actually ARE a software company and can't seem to figure out what they own and whether code in linux infringes or not, I'd be fairly willing to bet Baystar's $50 million that Baystar's "experts" have even less clue than SCO... or you, for that matter.
:-)
Easy bet, too. It's not my money
Put another way - I'd trust SGI's assertions that SCO ain't got shit for a case more than I trust some VC firm's experts. Exhibit A: thousands of failed dot-com IPO's. Exhibit B: SGI's actual experience writing and selling IRIX.
I kinda suspect that SGI know the Unix codebase better than SCO right now.
Ce n'est pas un vrai mouvement de robot!
From the article:
"BayStar Capital looks to invest in growth-oriented firms with strong management, substantial market opportunity and solid, comprehensive business plans, and we believe that all of those fundamentals are in place for SCO to succeed," said Lawrence Goldfarb, General Partner, BayStar Capital. "SCO owns the most predominant UNIX software assets in the I.T. industry, has a 20 year history of providing trusted software solutions to end users around the globe, and an aggressive and seasoned management team focused on generating profitable growth."
Are you fscking kidding me? How does SCO continually manage to BS rich investment firms into believing it is more than just a frivolously-litigating, artificial-stock-inflating joke? Are investment firms really that dumb? Can I sue IBM and just get $50 million by pretending to be a player in industry?
-jag
http://starboard.flowtheory.net/
And people keep saying what you have said with far less evidence.
SCO's lawsuit (not their obviously cracked copyright claims) rests on their claim that anything IBM developed for use with UNIX being owned by SCO and thus it's insertion in Linux being a contractual violation.
Do you really think IBM would sign a contract like this? One that would assign ownership of all of their technical advancements that have been used with their UNIX property of another company? Even if they did, do you think that with all their lawyers on staff they'd miss a fairly obvious clause like that when they deliberated over contributing to Linux?
Sure, it's possible that everyone at IBM suffered collective brain failure, but they're profitable and working on technologies that people want. A useful company with customers - not desperate.
Contrast this with SCO. A company so obvious run by crack-addled simpletons that they can't keep their story straight from week to week. This could be an act, except that they're opening themselves up to lawsuits for damaging the reputation of competitors, false advertising, making false claims for manipulation of stock prices (pump and dump), etc. Considering that the execs at SCO aren't doing this through underlings to allow them to claim ignorance later, any punative damages are likely to be applied directly to the officers of the company if they're found to be breaking the law. If this apparent ignorance and these wild claims are made up they're taking an incredible risk.
It's a lot likely that things are as they seem. SCO is full of idiots who ran a company into the ground and are playing the USA game of random high-dollar lawsuits and threatening people with high legal fees until they settle out of court (the $699 invoices vs the legal threat).
Now that SCO actually has some money to throw around, this is the ideal time for all of us who support Linux for a living to file our class action suit against them for the damages their false claims have had on our ability to make a living.
After all, in this impromptu, roadside interview, Darl @ SCO basically states that they have to protect their income (6:42 into the conversation) and their employees' livelihoods. Those of us who depend on Linux for a living should protect ours too.
As an independent IT pro, I can honestly say that my company's bottom line can definitely use an injection. SCO's unchecked, continuing spreading of FUD has seriously impacted the number of companies implementing Linux (thus lowering the number of potential customers).
Let's face it, SCO's practically using the court system as its marketing department. That "courtroom marketing" just got the company a nice, fat $50M check. I don't see how they can get away with this right under the SEC's (apparently not-so-watchful) eye. It's so ridiculously obvious that they pumped up their stock with false claims and dumped it successfully for a huge profit, and now they're getting ready for a second round of pumping. I wonder how much the SCO execs will rake in this time around. (watch SCOX tomorrow)
SCO: Give me a copy of your source code, the Linux source code, and the BSD source code and I'll tell you whether or not your claims hold merit. My bet is that after I publish my results, your precious UNIX products will have nice, big GPL and/or BSD licenses on them. Either that, or your UNIX products will fit on a 1.44MB floppy after I remove all of the code you stole from the BSD project(s).
It's great to see that your Bayside stakehorse just dumped another bankroll of chips in front of you. I'll see your UnixWare and raise you one Linux kernel. Now call, fold, or get the hell out of the game. Whatever you do, make it quick before everyone notices you're dealing from the bottom of the deck.
-- Stu
/. ID under 2,000. I feel old now.
What proof do you have that Microsoft is behind the SCO situation? Do you not believe it is possible that there exist TWO greedy corporate entities in the world?
"It takes considerable knowledge just to realize the extent of your own ignorance." - Thomas Sowell
you are shorting it at the same time? There is
no point.
Unless they are hedging their put options. (does
sco have options?)
I can believe a VC company doing this. All those braindead VC people from the dotcom days were plaowing much more money than this into similar hairbrained schemes, so there doesn't seem to be a lack of stupidity in VC companies.
What it does highlight is the way the VC suits think, and what they actually know of technology. It shows that VC suits like companies with management that makes big bold and agressive statements. It shows that VC companies will spend money on words alone, because SCO's verbal tactics open them to charges of slander and libel, and even if they actually win part of the case (although I severly doubt it, IBM is going to kill them in court I think) there's still the RedHat and IBM countersuits to consider.
What this makes me think is that it's time to start skinning VC companies for money again. All you need is some arsewipe businessplan and some agressive statements and someone who's been in the business for a while and the VC loonies will throw $50 milloin at you.
If you short the amount you hold all you are doing is protecting your capital amount. What you win on the shorts is what you lose on the shares and vice versa.
So unless there is something else I think the original post misses the point.
Not Just that, their no. 1 investor is Vulcan Capital which is Paul Allen's investment vehicle. Allen was co-founder of Microsoft.
See my journal, I write things there
The way this works, as I understand it:
e s% 2farchive%2fmag%2fissue95%2f1310018931.xml
1) BayStar loans Scox $50 million.
2) In return, scox owes baystar $50 million worth scox stock. NOTE: the 2.9 million shares is just an estimate based on scox's share price over the last 5 days. If scox share price falls to $8.50/share; then scox will owe baystar almost 6 million shares. Scox has about 13 million shares outstanding now - that means *huge* dilution.
3) baystar takes a huge short position in scox.
4) Since scox now has a cash position of $61 million, scox is now worth suing. Scox is already being sued by about six different companies, expect more to pile on.
5) Death spiral.
It's worth taking a quick look at the article.
http://www.redherring.com/Article.aspx?f=articl