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BayStar Interviewed Regarding SCO Investment
Gonzo_Warrior writes "BayStar's managing partner explains what led him to 'ask' SCO for their money back. In this article, Lawrence Goldfarb describes '...the wayward corporate behavior on SCO's part' that led him to reevaluate BayStar's position. In a letter to SCO last week, BayStar claimed that '...SCO's behavior violated provisions of the investment agreement and that BayStar's convertible preferred stock be redeemed.' The article notes that since its founding in 1998, BayStar has never before asked a company for its money back." CNet has a story based on talking to a BayStar spokesdrone.
It sounds to me that Baystar is unhappy with the way SCO has been doing things and will likely come to an agreement that allows SCO to keep the money (for the moment) in exchange for some management changes - perhaps.
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1. Concentrate on and press the legal issues and win. Results for BayStar are obvious.
2. If the court cases are to be lost/abandoned etc then SCO needs to have some public goodwill in order to attract new customers.
It isn't doing (1), all we are seeing is grandstanding and namecalling.
It surely isn't doing (2) - SCO is the most hated company in tech.
Darl fancies himself a scrapper who can take the heat, but he's sacrificing SCO and all of the shareholder equity to buttress his ego. A CEO should put shareholders first.
Regardless of the language, to me it looks like a no-confidence vote.
That which does not kill her only prolongs my agony.
An inefficient SCO is scary enough. One that drops the hype and just goes about this quietly could be worse. If nothing else, it would reduce the number of SCO-related articles here on /.
On the other hand, maybe that's a good thing... ;-)
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SCO did just name a new financial officer, and the market may also be anticipating more change in leadership following Baystar's request. Darl says he won't quit though. But he's been talking out of his ass for a while now.
IANA stock analyst. The only bath I ever took was in the market.
More music, fewer hits
We all know the type. Slick management type, wearing neatly pressed suits. Reads the type of trade publications that feature head shots of middle and upper managements atop articles full of jargon, but devoid of content. Power lunches. Golf trips. Owns a Lexus. Won't give a lowly programmer type the time of day.
These fools with millions and millions of dollars to spend somehow didn't get the information that the rest of us got for free.
I'm not sorry for them. Not even a little bit.
Fascism trolls keeping me up every night. When I starts a preachin', he HITS ME WITH HIS REICH!
I found it interesting that Baystar wants SCO to give up on UNIX to pursue the "intellectual property process." In other words, Baystar wants SCO to give up the only service it offers and pursue legal action against Linux (and Linux users) even more than it is now! In fact, if they do this (and a few other things), then Baystar might change their mind about recalling their stocks..
I wonder who would benefit most from this (cough Microsoft cough cough....)
ps - I do like the idea of no more Daryl McBride, except for the fact that he probably will help the Linux community more in the end with all his irrational rantings and ravings!
Baystar's problem is not with SCO's position on the issues, but their handling of the issues. Some quotes from BayStar spokesman Bob McGrath in the article make this clear.
"We think there are limited prospects of that business ever generating growing and significant revenue," McGrath said.
"And we believe it is diverting resources from going where they would have the most value--the intellectual property process."
BayStar asserts SCO's Unix products business doesn't hold long-term value for shareholders"
In fact, if SCO would get their act together and focus on just legal issues they would consider continuing support for them.
"We think they need to strengthen the senior team to get people with experience and background in the legal issues," McGrath said.
If SCO addresses BayStar's concerns, McGrath added, the investor is open to reversing its redemption request."
It is bad sign when your investors tell you to stop acting like a technical business and persue your legal intellectual properties as your business model.
I only look human.
My mother is a halfling and my dad is an ogre, so that makes me an Ogreling
Read what you C&P'd again. Baystar thinks that they need to spend less money on Unix and more money on executives with more savvy about IP cases. In other words, they want to get rid of Darl, and hire someone who can actually win cases to cripple Linux. (Not that such an outcome is likely or even reasonably possible.) Baystar is not our friend, unless they successfully take money away from SCO which will stop their operations rapidly.
"You're right," Fisheye says. "I should have set it on 'whip' or 'chop.'"
I'm not in financial services, so I really don't know your reasoning, but why would you think this means don't trust Baystar? This has only happened in less than .25% of their investments, and they're doing it because SCO allegedly broke one of the contract stipulations. If anything, I would say the moral is "don't fuck with an investor who has the legal grounds to take their money back".
do not read this line twice.
The enemy of your enemy is NOT your friend.
I'm sure that Baystar would leave their money with SCO if Microsoft could find a way to funnel $20 million to Baystar.
SCO wants money.
Baystar wants money.
Darl wants media attention.
Microsoft wants to cripple Linux.
We'll see how this plays out.
The moral of this story: when Microsoft points you to a place that you can spend tens of millions of dollars of your own money, they aren't doing it just because they like your tie. They are doing it for their own reasons, and won't really care if it turns out badly for you.
I hope BayStar doesn't get a dime back from SCO--hopefully they'll consider the merits of the issue more carefully next time Microsoft gives them a "hot tip." And hopefully BayStar losing tens of millions to SCO puts a chill through the investment community to beware of Microsoft advice.
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