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.

Comments

Baystar just looking for changes

[avkillick]

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.

They're looking at the endgame

[Ars-Fartsica]

The endgame for SCO only has two results, and they aren't approaching either with vigor according to BayStar:

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.

No Confidence.

[Flashpot]

Regardless of the language, to me it looks like a no-confidence vote.

Disappointing, but not surprising

[mmurphy000]

The net is not that BayStar is having second thoughts about pursuing claims against IBM and Linux, but that BayStar thinks SCO management is wasting time and money by going about it inefficiently.

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... ;-)

Baystar wants SCO to pursue IP full-time

[Extra Ketchup]

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 is not an Ally.

[Dareth]

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.