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SCO Investor Changing the Deal
Kurt Wall writes "According to this story, recent SCO investor Royal Bank of Canada appears to be changing its tune. RBC, along with BayStar Capital, invested $50 million in SCO, but now has changed the deal to give it veto power over the payment of the 20% contingency fees SCO's IP lawyers will get. As to the wisdom of the investment itself, an RBC spokesman would only say that the 'investment in SCO is passive, made to hedge an economic exposure resulting from client transactions.' Such as the SCO case collapsing, perhaps?"
Why aren't people selling their SCOX stocks! They are going to crump. Sell now...
Charts...
Going down over the last 5 days
About the same over the last 3 months
..doesn't appear impressed with SCO either!
Donte Alistair Anderson Roberts - hi son!
Karma: Chameleon
Probably you! You support SCO if you have investments with any of these companies or mutual fund holders...
Capital Guardian Trust Company 1,177,800 8.51 $16,288,974 30-Sep-03
Integral Capital Management Vi, LLC 316,600 2.29 $4,378,578 30-Sep-03
Royce & Associates, Inc. 1,441,200 10.41 $19,931,796 30-Sep-03
Integral Capital Management V, LLC 246,730 1.78 $3,412,275 30-Sep-03
Empire Capital Partners LP 205,000 1.48 $1,961,849 30-Jun-03
Barclays Bank Plc 174,686 1.26 $2,415,907 30-Sep-03
Bjurman, Barry & Associates 160,000 1.16 $2,212,800 30-Sep-03
ING Investments, LLC 143,100 1.03 $1,979,073 30-Sep-03
Oberweis Asset Management Inc. 112,000 0.81 $1,548,960 30-Sep-03
Whitney Asset Management LLC 76,967 0.56 $1,064,453 30-Sep-03
Royce Technology Value Fund 105,000 0.76 $1,004,849 30-Jun-03
Vanguard Total Stock Market Index Fund 24,713 0.18 $236,503 30-Jun-03
Vanguard Extended Market Index Fund 17,875 0.13 $171,063 30-Jun-03
Marketocracy Masters 100 Fund 3,900 0.03 $53,937 30-Sep-03
Spartan Extended Market Index Fund 3,753 0.03 $54,831 31-Aug-03
Spartan Total Market Index Fund 3,132 0.02 $45,758 31-Aug-03
Vanguard Balanced Index Fund 2,125 0.02 $20,336 30-Jun-03
Quantitative Master Series Tr-Extended Market Index Seri 1,775 0.01 $16,986 30-Jun-03
Vanguard Institutional Index-Inst Total Stock Market Ind 705 0.01 $6,746 30-Jun-03
Manufacturers Investment Trust-Total Stock Market Index 349 0 $3,339 30-Jun-03
So did SCO just announce that intend to issue more stock? I'm confused by what they intend to gain from this statement.
And now, did then just announce their intent to sell the company?
Like I say, I'm not a lawyer, and this might be typical legalese, but if not, is this significant?
Rule #1 -- Politics always trumps technology.
Hopefully the stock keeps up this trajectory!
--
I am cool for a variety of reason, but mostly because I use Oddpost
Actually, they are alosing at about 3 Million a quarter, last I checked. I don't know what for, but they were spending that much.
All Ad hominem replies happily ignored as the sender shall be deemed to lack the faculties to comprehend the equation.
No, you do not understand what is going on here. RBC invested in SCO on behalf of a third-party. The investment was made by RBC on behalf of a client. The client gives RBC the money plus a fee, and RBC puts their money into the deal.
No, what is going on here is someone is trying to make a wager on SCO and they don't want anyone to know about.
SCO's lawyers: "That wasn't part of the bargain!"
RBC: "We're altering the deal, pray we do not alter it further...
They aren't altering SCO's deal with the lawyers.
What they're doing is getting agreement from SCO that SCO will not take an additional unilateral action (such as selling the company) that will trigger the CYA part of the deal (giving 20% of the company to the lawyers) - unless SCO first gets investor approval.
"You promised them 20% of the company if you sold it. That would dilute our investment. So don't do that without asking us first."
NO change to the deal with the lawyers. Just don't push the red button (and give away a fifth of the store) without asking the owners first.
Bantam Dominique roosters crow a four-note song. Once you've heard it as "Happy BIRTHday" you can't NOT hear it that way
That the investors have forced SCO and Boies to agree to changing the deal might indicate that they (the investors) either:
- learned something that gave them the leverage needed to force/blackmail SCO et al to accept the changes
- threatened SCO et al with a lawsuit to recover their investment because they were misled as to where the money was ultimately going
Either way, not good news for SCO and Boies, and it explains the delay in their filings.The investment has nothing to do with merits.
If SCO wins this case other companies who are Linux dependant will get a HUGE loss.
RBC has probaly invested in some of these companies.
They gamble a small amount of money on SCO winning.
This way they have less risk, SCO loses, their Linux investments payback - 50 million.
The SCO case wins, they lose their Linux investments (or they are damaged) They get a windfall from SCO which partially offsets this loss.
Think of gambling on a sports games against two people.
They will pay 3:1 that their team wins.
Bet $2, $1 each, and no matter who wins, you are ahead $1. Welcome to hedging.
Your post is a dup.
It loses you no money
I don't understand what you wrote. But you seem to be saying that short-selling is low-risk, which is totally wrong.
Here's how short-selling works:
You expect a stock to go down in price. You borrow some shares of the stock, and sell them. Then at a predetermined date, you must buy the stocks back, and return the shares to whomever loaned them to you. If you sell at $16 per share, and buy back at $10 per share, you get to keep $6 per share, less any fees (you need to pay whomever loaned you the shares).
But if you buy at $16, then Darl announces that SCO actually owns South America and the stock price goes up to $26, when it's time to buy back the stock shares you need to pay $10 per share.
If you simply buy some stock, the worst thing that can happen is that the stock devalues to zero, and you lost all the money you spent on the stock. With short-selling, if the stock price unexpectedly soars, you can lose vast sums of money in a hurry. Buy-and-hold is much safer than short-selling.
steveha
lf(1): it's like ls(1) but sorts filenames by extension, tersely
What are you talking about? SCO stock would have been a great investment, it went way up. That's the point of a pump 'n' dump. As long as RBC got out just before it collapses, I think it's a good investment. Not because they think SCO is right, but because they think the stock would go up like it did.
RBC is not in this for pump-and-dump. They are a banking institution and have way too much to lose from the consequences of taking part in such a scheme. Any gains from a pump-and-dump would be outweighed by the massive loses from being perceived as an untrustworthy entity to do business with.
We have only a handful of major banks here in Canada. When they do anything that might be conceived as remotely negative, they get severly attacked for it.
Sure, a -$2 week. But keep it in perspective. This has still (so far) been a profitable endeavor on their parts.
There are no trails. There are no trees out here.
Yahoo story
/PRNewswire-FirstCall/ -- The SCO Group, Inc., (Nasdaq: SCOX - News) the owner of the UNIX operating system, today confirmed that on Wednesday, December 10, 2003 at approximately 4:20 a.m. Mountain Time, it experienced a large scale distributed denial of service (DDoS) attack. The attack caused the company's Web site (www.sco.com) and corporate operational traffic to be unavailable during the morning hours including e-mail, the company intranet, and customer support operations. The company's Web site remains unavailable while this DDoS attack continues to take place. The company is working with its Internet Service Provider to restore www.sco.com to legitimate Internet users.(Logo: http://www.newscom.com/cgi-bin/prnh/19990421/SCOLO GO )
Check for yourselves
SCO Experiences Distributed Denial of Service Attack
Wednesday December 10, 3:19 pm ET
Syn Attack Halts Availability to SCO's Internal Operations
# LINDON, Utah, Dec. 10
This specific type of DDoS attack, called a "syn attack," took place when several thousand servers were compromised by an unknown person to overload SCO's Web site with illegitimate Web site requests. The flood of traffic by these illegitimate requests caused the company's ISP's Internet bandwidth to be consumed so the Web site was inaccessible to any other legitimate Web user.
"SCO is working with law enforcement officials and gathering information through mechanisms that we have in place to help us identify the origin of these attacks," said company spokesperson, Blake Stowell. "We deplore these activities by those who try to intimidate or harass legitimate businesses through cyber terrorist tactics while hiding their true identity."
THEN they would have to prove that ownership.
The thing is, Linus (And hence the Linux kernel effort) has detailed records of what came from whom (and therefore from where). SCO has no such records except the vague statement that "whatever we (sco) have we own."
If there is common code, and Linus can prove who provided it to him (e.g. who wrote it), and SCO cannot prove even the first records of who provided the code to *them*, then guess who legally possessess "proof of ownership."
See the word Provenance (which usually applies to "fine art"). Lets say I walked up to you with a genuine Picasso, proveably genuine, if I can't provide the chain of ownership that demonstrates that it is mine to sell to you, you would be a fool to buy it.
The same basic features apply to the (mis-named) intellectual property issues. If SCO demonstrates that there is code in common between something they claim to own and the Linux kernel, they will need to be able to make a stronger claim of ownership than that made by the OS community.
This is the basis of the ATT vs BSD settlement. In that case BSD was more pursuasive in their ownership of the disputed text because they had the original copyright notices that included the names of the authors, and they had the authors right there saying "yep" I wrote that under X cirsumstances. ATT was in the SCO position of just having some program text in a bunch of files, no attributable authors and no copyright notices.
The point is, SCO has produced no proof because they have none. They are (probably) hoping to release whatever confluence of code they may have as close to closing arguments as possible, on the grounds that such material would apear to stand on merrit. They *cannot* release that data because the very presence of submission and aproval-for-inclusion records kept in the linux project system (BitKeeper et al) is, by definition, "more pursuasive" than any straight claim.
We saw how fast the one example that got out was debunked. By this time SCO is hoping to do a drive-by submission-of-evidence. That never works. 8-)
Guessing that they have some kind of case is very bad. The simple fact that they havn't produced a single spesific instance of (provenanced) code in the process of pursuing thier case, is rather indicitive.
Remember that in civil cases there is no "beyond a reasonable doubt" standard. It is purely "proponderance of evidence." In a civl matter it is *ONLY* a question of who has "more and more credible" evidence.
"incredible" evidence and clames are, by definition, useless.
Innocent people shouldn't be forced to pay for inferior software development.
--"Code Complete" Microsoft Press