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Royal Bank of Canada Cashes Out of SCO; SCO Begins Layoffs

Posted by ryuzaki0 on from the so-long-and-thanks-for-all-the-lawsuits dept.

jbell99999 is the first one to submit news that the Royal Bank of Canada is divesting itself of SCO stock. They're selling part of their preferred stock to Baystar, which has already indicated that they want to redeem their shares, and converting the rest to regular stock, which they can presumably sell on the open market. In other SCO news, Versicherung writes "The Santa Cruz Sentinel is reporting, SCO is laying off 10 percent of its worldwide workforce. The cuts come less than a month after the company brought on a new chief financial officer and just before the company ended its second fiscal quarter April 30." See also stories at Eweek and Linuxinsider.com.

5 of 585 comments (clear)

  1. Where have you been? by Anonymous Coward · · Score: 5, Informative

    "Begins layoffs"? Where have you been, SCO has been laying off staff for months now.

    In Santa Cruz, for example, they sliced their tech staff by like 80% or something.

  2. Not a Good Stock to Own by jcrash · · Score: 5, Informative

    Ouch - currently, 50% of the total float of SCOX (the SCO Stock) is shorted.

    So, for every person betting it is going to go up, there is someone betting it will go down.

    --
    I do not fear computers. I fear the lack of them. Isaac Asimov (1920 - 1992)
  3. Well... by QuasiCoLtd · · Score: 5, Informative

    According to Zdnet those being laid off are mostly in the engineering, marketing, and sales depatments. This is very telling for a so-called "tech" company to lay-off those responsible for creating and selling your core product. Of course we all know that SCO is a litigation company and has no need for engineers to improve a product, no marketers to hype the non-existant product, and no salesmen to.... well you get the idea.

  4. Naturally, Slashdot get's it WRONG. by Saeed+al-Sahaf · · Score: 5, Informative

    Good Lord. RBC is not divesting itself of SCO stock. They are converting preferred to common. Whole different thing.

    --
    "Who are in control, they are not in control of anything - they don't even control themselves!" - Glen Beck
    1. Re:Naturally, Slashdot get's it WRONG. by MyHair · · Score: 5, Informative

      They are converting 1/3 of their preferred stock at an enormous loss (13.50 vs. curent price 5.94) and selling 2/3.

      The prevailing presumption is that they sold the 2/3 at a loss and will strategically dump the common stock. Keeping the common stock after a move like this wouldn't seem to make sense, but there is probably more going on than any of us know.

      So they divested 2/3 of their stock for unknown terms, lost some benefits of the PIPE deal and are holding 1/3 of their original investment at >50% loss over 7 months. They presumably had the option to force redemption like Baystar, and being the majority investor would get their slice of the pie first. Instead they wait to weeks and pull this. Sounds like they're cutting their losses and splitting to me.

      But admittedly that's not certain yet.

      My best guess is that RBC prefered cutting losses and dropping SCOX rather than fighting about redemption, while Baystar has committed to redemption or bullying, and doubling their stock holdings for presumably a nice discount increases their leverage against SCO management and increases their redemption penalty should they win.

      RBC folded, Baystar raised, and SCO is "all in".