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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?"
I'm sure SCO's lawyers are going to be upset about this.
SCO's lawyers: "That wasn't part of the bargain!"
RBC: "We're altering the deal, pray we do not alter it further..."
I think we'd all enjoy a nice cold beverage. -David Letterman
Sometime late last fall I received a call from a local business. They had a Unix box that was on the fritz, but unfortunately only had MCSE's on their support staff.
After meeting up with my contact at the site, I tried to get a little more information about what kind of problem it was having. As we walked to the elevators he explained that no one really knew exactly what the box did, or if it was even in use anymore, but it was obvious that the machine was rebooting itself for no apparent reason.
We got out of the elevator at the basement level of the building. The server was sitting alone in a damp room with a concrete floor and concrete walls. I was already pretty sure it was going to be a hardware problem, since Unix boxes don't tend to reboot for absolutely no reason. I pointed out that the damp environment was undoubtedly bad for the machine.
He said, "The honest truth is, no one wants anything to do with this box. It's sitting down here because we're out of space in our server room, and the only guy that knew anything about this box quit three years ago, so we don't even know if it's doing anything useful." With that he turned and left me to figure out the problem.
The machine was plugged in, the power switch was on, but the console was blank and mashing on the keyboard didn't seem to have any affect.
As I was unscrewing the side panel from the case I started to notice that there was a really rank stench in the room. When I first entered the room I figured it was just mildew from the dampness or something, but it was really strong now. I really just wanted to get out of that dimly lit room and out into the sunlight and fresh air.
It was hard to see anything in the case, so I fumbled around inside it with my hands making sure all the internal cables were securely attached to their respective components. Suddenly I felt something squishy and slimy on my hand and jerked it out of the box.
At that instant the machine came on and began to POST. As the memory counted up, I turned the box so I could see into it by the light of the screen. Now I could see the cause of the problem. A rat had crawled into the case via an open drive bay and made a nest near one of the power supplies. She and several hairless newborns had died in there a week or two previous, and I had just stuck my hand in the middle of it all.
As I was wiping my hands off on my pants, I noticed the machine had finished booting. I was like "Ugh, gross! This thing is running SCO Unix!"
Needless to say, I marched right up to the IT offices and told them that the machine was undoubtedly no longer relevant to their business and that they should just throw the whole mess in the dumpster.
---
Raising the bar on Slashdot trolling since 2003
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.
..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
Where is a Golgafrincham Space Ark when you need one?
Ronald said nothing. He flung himself from the room, flung himself upon his horse, and rode madly off in all directions.
BC spokesman would only say that the 'investment in SCO is passive, made to hedge an economic exposure resulting from client transactions.'
What he really meant to say was: "we don't really give a shit about this company, and this investment was the stupidest crap we've ever done."
Will code a sig generator for food
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
Is it just me or does this article seem to have a Pro-Sco slant towards it?
:-) (emphasis on surprise)
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 Linux was derived.
Derived is used rather loosely here. To a casual looker, it might sound like SCO is in the right.
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.
Whoa!
SCO had been pressuring the courts to force IBM to reveal its Unix and Linux source code so SCO could prove that IBM was using stolen code. But the judge ruled that SCO would have to present its own Unix source code first and identify which software code had been stolen.
That does'nt make sense considering just about anyone can look at Linux source.
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
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
Unfortunately as a result, they're helping prop up the stock price of an really awful company.
Vote Quimby.
One user states:
You can't spell Fiasco without SCO
did anybody else notice the other reason RBC has
? f= features
."
been in the news
http://www.cfo.com/article/1,5309,11460,00.html
lately? To quote:
"Goldin said that Bank of America and Royal Bank
of Canada knew of fraud in Enron-related
transactions. .
Charming profile they're developing of late.
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.
/. 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.
The fact is, despite what
Maybe partying will help...
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
And announced the intention to sell 30,000 more. In addition to the tens of thousands he's sold over the last months.