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BayStar Cashes Out of SCO Stock
Kurt Wall writes "According to Yahoo! Finance, BayStar, the company that funded SCO to the tune of $50,000,000, and then later changed the terms of the deal, has requested that SCO redeem the 20,000 shares of preferred stock issued in return for the funding. The reason? BayStar states that 'SCO has allegedly breached Sections 2(b)(v), 2(b)(viii) and 3(g) of the Exchange Agreement.' Naturally, SCO thinks it has done nothing of the sort."
Talk on the boards is that the breaches are due to SCO not revealing the entire story regarding their claimed 'ownership' of UNIX SysV. Notice SCO now states that UNIX is a registered trademark of The Open Group.
In any case, looks like you live by the sword you die by the sword. It was after all Darl who stated "Contracts are what you use against parties you have relationships with". None of this using contracts to clarify just what each other's purposes are, and being a record of an agreement, they're to be used as weapons. SCO's breaches are what will come bite them on the ass, and nothing will save them with a contract that they can't hide way back in the muddying of time. $20million worth of redeemed stock is $20million SCO can't use against Linux, Customers, Ex Customers or whoever else has tried to be nice to them in the past.
It's only a few hour's drive to Lindon from here. I wonder if I should go watch the fireworks.
Shak's nude anime gallery
Did anyone notice that the stock was tanking BEFORE the press release? I guess they put out a negative release to justify the insider-trading fall.
Even if they were, they've been exposed and SCO is burning up rapidly and isn't likely to be able to stick it to Linux. There's little reason for anyone, including Microsoft, to keep money in SCO at this point.
May we never see th
or I'm not Anonymous Coward!
Teehee, shorted another 200 shares at $9.15 when I heard the news. To all my fellow cube-dwellers out there, remember that sometimes reading the message boards can be whole hell of a lot more profitable than whatever the fsk it is that your employer's paying you to do...
I'm not trolling, I'm trying to be insightful, or at least funny. Honest!
8D
"In a 32-bit world, you're a 2-bit user. You've got your own newsgroup, alt.total.loser." -Weird Al
If we don't go to court to test the legality of the GPL in the SCO case, it means it will happen later... perhaps against someone who doesn't have their head up their ass.
Going to trial against SCO is a sure thing for IBM, and therefore good for Linux. IBM and Redhat would tear SCO a new one, and the GPL would have it's day in court against the mental midgits from Provo.
If SCO goes bankrupt, this (I assume) goes in a legal round file somewhere. Then we can just wait for Microsoft to come at us directly with an army of lawyers that dwarfs IBM.
According to an article on The Street one analyst didn't think BayStar would have much of a chance of getting their money back but this would make it incredibly difficult for SCO to raise any more money (not that they had anyone beating down their door to loan them money lately). By publicly asking for redemption over a broken clause I see this as BayStar's big, giant "FUCK YOU" to SCO.
Not necessarly true. Remember, Microsoft wants all Unix vendors dead. Order may not be important.
"It's the height of ridiculousness to say for those 9 lines you get hundreds of millions."
Funny that they are the ones announcing BayStar putting the pinch on them. Guess they want to put the "positive spin" on it, just like everything else...
That, and I suspect that if any insiders dumped a bunch of stock today without announcing it would be eligable for a perp walk.
If you say it dropped 10.56% and it was at 100 before; or, if it was at 20 and dropped 10.56%, they tell a lot more.
Yeah, both stocks dropped 10.56%
I don't think it really matters what the initial price was. A stock dropping that much is bad no matter what the initial price.
You argument works a little bit better if the poster was saying how the stock dropped 5 points (not percent). If the stock was originally at 100 and it dropped 5 points that's not too big of deal. If a stock was at 10 and then dropped 5 points, it might very well be game over.
Casual Games/Downloads
Do you believe in SCO's business model? What they sell?
Kind of a shame your attitude is what the stock market is all about these days.
As we've come to expect, /.'s editors got the story wrong. Baystar has not cashed out. It would like to. It's trying to. But it's not going to get its money out without going to court, which could take a couple of years.
A couple points you might be overlooking:
1) Rather than FUDding the market as a whole, SCO is trying to FUD their own customers. This may have bought them a couple more years of legacy SCO UNIX revenue. Or it might have backfired.
2) Without the lawsuit, SCO had a 100% chance of going bankrupt. With the lawsuit, SCO has a 99% chance of going bankrupt.
You ever work for government? Especially the agencies that tend to involve themselves in power politics and shady deals? Let's just say that they're definitely not the masterminds portrayed on the "X Files", despite their unwavering belief in their own intellectual superiority.
Most conspiracies are one part cunning, one part accident, and eight parts a bunch of morons all acting at cross-purposes. But, like the monkeys and the typewriters, every once in awhile they produce something legible...or in this case - perhaps - something that actually works.
SCO smells just like this. A dash of cunning, a pinch of good luck, and a huge dollop of stupidity contributed by a bunch of dumb-asses convinced they're the next Napoleons of the political/business world. By sheer happenstance things just might work out well for the puppet master...whoever that happens to be.
But if it does it will have had nothing to do with masterful planning. The conspiracies put forward by shows like the X-Files and the loons just don't exist. Conspirators, by and large, are either too arrogant, too stupid, or both to actually pull off whatever it is they're aiming for...assuming you can keep them from fighting with each other over pecking order long enough to get anything done.
Max
My god carries a hammer. Your god died nailed to a tree. Any questions?
SCOX down $1.29 to 8.37 (13.35%) today and already down more in after hours.
Classic PR move - release bad news on a Friday when everyone has gone home and the markets have time to absorb and forget about it over the weekend.
the major advances in civilization are processes which all but wreck the societies in which they occur - A.N. White
I don't see any reason they wouldn't, given their past behaviour.
Yes. As long as you can find one sentence that demonstrates irony as well as the parent. And can then choose an apt title that has a resonance with /.
If you have had a consistent short position, you will have gained 50% or so on your money. If you feel confident in your position, buy to cover and take out a new short position at the current share price, if SCOX falls by 50% again you will make a 50% return on your new position, but if you leave it as is you will only see an additional 25% return above the 50% you have already made, the difference is a 125% return vs. a 75% return. Theoretically, if you you cash out and take a new short position every time SCOX drops 50%, you can earn vastly more money.
Example: $1000(SCOX@$18) original short positon in SCOX. SCOX drops 50%, you make $500 and lock that in. You take a your gains and take a $1500(SCOX@$8) short position, that drops 50% and you make $750 and cash out again. You have now made $1250 more in gains, more than doubling your original position. By doing that every time SCOX drops in half, your position grows by half, $1500(SCOX@$8) turns into $2250(SCOX@$4) into $3375(SCOX@$2) into $5062.50(SCOX@$1)into $7593.75(SCOX@$.5) and then you let it ride to zero and victory where you collect! Under your plan the most you can make is $1000, my plan will make huge cash money but unfortunately I am too chicken to do this as I am nearly broke. A way to cut your risk is to sock away some of your gains in cash to protect against a margin call if SCOX momentarily fluxuates upward. A way to magnify your gains is to find an instrument that will go up in direct proportion as SCOX falls, but you will probably need cash on hand if your short position gets called in. A lot of people shorting SCOX can completely obliterate the share price in a matter of hours under the right circumstances. Enron and Worldcom went down that way, the short sellers took over and they went down in flames. You ever wonder why rich people like hedge funds? Now you know!
The chances of either Baystar or RBC getting their money back is slim to none.
"The chances of BatStar seeing a dime are, well, slim as a thin dime."
I don't imagine it's about the money. This is an attack aimed at the investor mindset. Finally, FINALLY, someone who is in a leadership position has decided to call out SCO on their lies and crimes. Still a bit more subtle than I would like to see personally, but notice that this will be pretty much the first action that gets any hint of negativity into the mainstream news reports.
Until now, pretty much every report on SCO is tempered with language that makes it sound as if there is some conceivable merit to the SCO allegations against IBM and RedHat, and like it's conscionable that Darl McBride is not in prison, etc. (Unless you read Slashdot or Groklaw, which, it may suprise you to note, people who make real business decisions haven't read or even HEARD OF!)
The BayStar announcement HAS TO hit the press. It may seem less important than public statements from IBM or Novell, but those are just tech companies, meaningless in the financial world. This news item will get noticed. People who otherwise don't have a clue that there's anything amiss with SCO, hard as it is to imagine, will notice this.
If only the press had any balls, to take off the gloves and tell it like it is, spelling the facts out with the biases where they ought to be, like PJ does. A hostile treatment of SCO would sell papers and so on wouldn't it? You'd think you'd hear about this stuff, but you don't, unless you look for it in fringe places like slashdot and groklaw.
-fb Everything not expressly forbidden is now mandatory.
Thats funny as hell, you should add that to music :P