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SCO Investor Changing the Deal

Posted by timothy on from the money-is-linked-to-control dept.

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?"

6 of 392 comments (clear)

  1. Missing text in article by RobertB-DC · · Score: 5, Insightful

    SCO has admitted that its action is designed to shore up sagging sales by wringing revenue out of its rights to Unix, an older operating system from which [something is missing here] Linux was derived.

    Shouldn't the blank be filled in by the words "SCO contends"? As in, "Unix, an older operating system from which SCO contends Linux was derived."

    I thought the whole point of the defense against SCO is that Linux is Unix-like, but *not* "derived" from Unix. Unless I'm wrong (a frequent situation), the newspaper article has swallowed a little too much FUD today.

    --
    Stressed? Me? Of course not. Stress is what a rubber band feels before it breaks, silly.
    1. Re:Missing text in article by tuffy · · Score: 5, Insightful

      I don't think we need to read it quite that literally. "Derived", in this instance, can simply mean that Linux as an OS is a descendent of Unix, not necessarily that it derives any source code from Unix.

      --

      Ita erat quando hic adveni.

  2. Surprise in court? by MonkeyDluffy · · Score: 5, Insightful
    From the article:

    IBM scored a surprise legal victory in that court case when a judge ruled on Friday in favour of IBM in SCO's trade-secret violation lawsuit against the computing giant.

    Huh? Even SCO wasn't surprised by what happened last friday in court.

    -MDL

    --
    Happy meals fund terrorism
  3. Re:Stock Charts by steveha · · Score: 5, Insightful

    From earlier discussions on Slashdot, I gathered that there isn't much SCO stock available on the terms that let you short-sell it; and what is available was already grabbed by other short-sellers.

    But there is one big problem with short-selling SCO stock:

    Short-selling doesn't work unless you can predict when the stock will go down. Given that no rational and well-informed person would buy SCO stock, I'm stumped to guess why it's as high as it is, and twice as stumped to say exactly when it will go down.

    You might be all set to short-sell SCO stock, and then Darl McBride might announce that SCO actually owns UNIX, BSD, Windows, MacOS, and CP/M; SCO stock doubles overnight and your short-sale, instead of making you money, loses you a lot of money.

    steveha

    --
    lf(1): it's like ls(1) but sorts filenames by extension, tersely
  4. In a way, good news by multimed · · Score: 5, Insightful
    Taking the "RBC spokesman" at his/her word, this is pretty interesting. By saying that the SCO holding is a hedge, they're saying that they are invested/investing pretty heavily in the other side and just trying to protect themselves in the event that something crazy happens and SCO wins. It doesn't mean they believe in SCO just that they're invested deep enough into presumably companies with a large portion of Linux business that they've taken out an insurance policy just in case. Which is good news because you don't buy insurance because you think something bad is going to happen, you buy it to protect yourself in case it does, but hope it doesn't. At least that's my interpretation of "hedge."

    Unfortunately as a result, they're helping prop up the stock price of an really awful company.

    --
    Vote Quimby.
  5. Re:Stock Charts by worm+eater · · Score: 5, Insightful

    Given that no rational and well-informed person would buy SCO stock, I'm stumped to guess why it's as high as it is, and twice as stumped to say exactly when it will go down.

    The fact is, despite what /. would have you think, no one is 'well-informed' about this case. It is a huge tangle of intellectual property law, contract law, and source code. No single person really knows what SCO can prove, what IBM can prove, where the code came from, where it is now or who owns what. There's plenty of speculation, and I personally wouldn't buy into SCO, but investors like to gamble -- and given the fact that SCO (David) is taking taking on IBM (Goliath) I guess the conclusion is they must have some kind of case. Darl's putting up a BIG front, and that's what investors look for.

    --
    Maybe partying will help...