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SCO gets $50 Million Investment

Posted by ryuzaki0 on from the fuel-to-the-flame dept.

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."

5 of 491 comments (clear)

  1. Worst-case scenario by ca1v1n · · Score: 3, Insightful

    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
  2. This is so irresponsible by Texas+Rose+on+Lava+L · · Score: 3, Insightful

    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

  3. Re:It's actually good news if you don't like SCO by screenrc · · Score: 3, Insightful
    What is the point of buying stock (go long), when
    you are shorting it at the same time? There is
    no point.


    Unless they are hedging their put options. (does
    sco have options?)

  4. Re:bingo- found it by hughk · · Score: 4, Insightful

    Not Just that, their no. 1 investor is Vulcan Capital which is Paul Allen's investment vehicle. Allen was co-founder of Microsoft.

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    See my journal, I write things there
  5. read redherring article to understand by walterbyrd · · Score: 3, Insightful

    The way this works, as I understand it:

    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=article s% 2farchive%2fmag%2fissue95%2f1310018931.xml