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BayStar Interviewed Regarding SCO Investment

Posted by ryuzaki0 on from the crimping-their-style dept.

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.

6 of 277 comments (clear)

  1. I don't get it. by Anonymous Coward · · Score: 5, Interesting


    SCO's stock price, which fell 38 cents yesterday to $6.80 a share, has dropped 30 percent since last Thursday, the day BayStar sent its redemption letter.

    .. but now it's at 7.96. That's why I'm a geek and not a Wall Street suit, I can't see any logic in the stock market. Isn't this NYTimes article more bad news for SCO?

    1. Re:I don't get it. by meringuoid · · Score: 5, Interesting
      A large proportion of the SCO stock is shorted. What this means is that people borrow shares in SCO and sell them. Later, when SCO's stock value has dropped, they buy back those shares to return them to whoever they borrowed from in the first place.

      It could well be that SCO has dropped far enough that a lot of these people are buying - taking the profit on their short sells. That would produce an upward trend.

      But then IANAStockmarketGuy. All I know about this sort of stuff I learned from SCO :-)

      --
      Real Daleks don't climb stairs - they level the building.
  2. Baystar may want to fire Darl by jaymzter · · Score: 5, Interesting

    More on this at Groklaw and the Mercury News

    "BayStar Capital Management LLC believes SCO needs to hire executives with more savvy about intellectual property cases and spend less money on its Unix products, BayStar spokesman Bob McGrath said Wednesday."

    "SCO's chief executive is Darl McBride, whose cash compensation totaled $986,047 in the company's fiscal year ending last October. That pay package troubled BayStar, McGrath said, given SCO's small size - the company has annual revenue of $79 million and about 300 employees."

    Baystar may finally be the one's to shut oldSCO's mouth for us so that IBM can finish the execution cleanly

    --
    If thou see a fair woman pay court to her, for thus thou wilt obtain love
  3. Finger pointing by Lord+Grey · · Score: 5, Interesting
    From the article:
    Microsoft initially recommended that BayStar take a look at SCO. But there is nothing unusual about that, Mr. Goldfarb [managing partner of BayStar] said. BayStar often talks to the investment and venture arms of major technology companies like Microsoft, Intel and Cisco. "It was evident that Microsoft had an agenda," Mr. Goldfarb said.
    Does anyone remember the leaked memo that pointed to Microsoft's interest in the BayStar investment? Many people in that thread guessed that perhaps Paul Allen arranged the deal on the golf course or over the weekend or something. Apparently, that point is moot. BayStar and SCO both knew who was behind it.

    What about the statement from Blake Stowell of SCO that, "Contrary to the speculation of Eric Raymond, Microsoft did not orchestrate or participate in the BayStar transaction."?

    Now, who needs a tin-foil hat?

    --
    // Beyond Here Lie Dragons
  4. What's more interesting is.... by Excelsior · · Score: 5, Interesting

    More interesting is the article over at ZDNet. In that article, Baystar contends that Darl should step down, and that SCO is wasting it's time with the Unix business. Baystar suggests that SCO make litigation its only business.

  5. Already discounted information by mdfst13 · · Score: 5, Interesting

    Since it has been known for a while that their products are crap, it doesn't make much difference if someone says it. However, if Baystar sticks to the money back demand, it bankrupts SCO, making the stock worthless.

    Some people still believe that there is a possibility that the lawsuits may bring in money. A bankruptcy precludes that (even if the lawsuits continue under a new owner, the money won't go to the stockholders). Thus, Baystar not forcing them into bankruptcy is good for SCO stock.

    Which should we find more convincing: where Baystar put their money (if they remove the money back demand, they are indicating that they think they will get more money if they wait, i.e. that SCO will be more valuable after the lawsuits); or what they say (that SCO has crappy products).

    Yes, we have now gotten to the point where the comment, "your products are crap, just stick to suing people," actually is a rosy view of SCO's future. No one believes in their products. At least some people still believe in their lawsuits. SCO is no longer a tech company. They are just a bundle of lawsuits hoping that one will carry through to a big reward from the deep pockets of IBM, Daimler Chrysler, or AutoZone.