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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.
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?
All the way back to 1998, a whole six years ago. Now there's history for you. Almost dynastic in its scope..
Cheers,
Ian
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.
OpenOffice tips:richhillsoftware.com
over the years, SCO is the first that they've asked for the money back from. If that isn't a tell, I don't know what is.
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.
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
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... ;-)
The Busy Coder's Guide to Android Development
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?
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!
Offtopic but.... Link on SCO's home page: "Why SCO could Win: Week Two. -- eWeek.com." However, if you actually click on it the article title on eweek is "Why SCO Thinks It Can Win"??
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.
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
oh brave new world, that has such people in it!
> 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.
We all know the type. Scruffy employee type, wearing wrinkly shirts that have been sitting in the dryer for 4 days. Reads perl programs full of ASCII art that actually compiles and runs, though devoid of meaning to the MBA. Pizza lunches. Beer hikes. Runs linux. Won't give a snooty manager an honest answer to "How long is it going to take?"
These fools with millions and millions of lines of code to give away somehow didn't get the million dollar bonus we got.
Sheesh, evil *and* a jerk. -- Jade
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.