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Royal Bank of Canada Cashes Out of SCO; SCO Begins Layoffs
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.
Say what you want about the policies or politics of SCO, it is always unfortunate when large numbers of people are laid off due to the problems of the company (ie those who made the bad decisions get to keep their cushy jobs).
Help Brendan pay off his student loans
Regards,
John, human
Falling You - beautiful
- Have a product
- that is involved in sales
- to customers
- generating revenue
SCO seems to have none of these things.Some mornings it's hardly worth chewing through the restraints to get out of bed.
I do fear that the next spin on this will be martyrdom, Poor little SCO couldn't get justice before it was forced to its knees by the brutal linux movement sponsored by the behemoth IBM, or something to that effect.
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If I were an employee there I would have been looking for a new job for months and months and months... Not because I hate SCO but because I would consider the job to be too unstable. If they couldn't have the foresight to do the same... screw em.
Just to add another point of view... this may be a bad thing.
[usual disclaimers here; I'm a layperson who has to deal with issues related to things like this occasionally]
The difference between a real company and an intellectual property holding company is that a real company has some skin in the game when it comes to treating patents as trading cards. An IP holding company doesn't.
As a simple example, consider two companies, "A" and "B", with a patent portfolio of 100 patents each, and real products that they are trying to sell.
When company A says to company B "you're infringing patent A17", B can use its portfolio defensively, and come back with "yes, but you're infringing patent B34; let's trade licenses".
If company A is an IP holding company, there's nothing company B can do but pay whatever extortionate price: Company A has no product, and is therefore not infringing any of B's IP. B is pretty much hanging in the wind.
The only place this isn't true is where B has some IP that A acknowledges is the basis of derivative IP held by A, _and_ A values the ability to continue sublicensing it without B raising sublicense fees for the original work in response to the extortion suit.
IF SCO is, effectively shedding their vulnerable assets, and IF they really have IP assets, this could be an entrenchment where it could end up being very hard to dig them out for a very long time.
The only real recourse to this sort of business model is for company B to attack companies that are infringing B's portfolio, and which are owned by the same people who own company A - effectively countering extortion with blackmail.
Yeah, I'm one of those people who think we need intellectual property law reform.
-- Terry
Most of us aren't cheering because someone is losing their job, but because the company that is being such a shit is in trouble.
Kind of like how you might feek bad for telemarketers (the employees), but were happy when the do - not - call list went into effect.
"Faith: Belief without evidence in what is told by one who speaks without knowledge, of things without parallel." - A.B.
I don't know how you come up with 10 pissed off lawyers.
Last year, in June, but I think even up until October, SCO claimed to have 330 employees.
When the recent layoffs were announced, they said they were laying off "way less than ten percent" of their 275 employees.
275? I thought they had 330?
Since SCO currently has 275 employees, the "way under ten percent" must mean they are laying off 27 people, which would be 9.81%.
This leaves them with 248. This means they have lost 82 people (330 - 248) or 24.84% ("way under 25%" using SCO speak) of their workforce in less than a year. Perhaps even in just six months.
Now since SCO didn't have layoffs until now, how do you suppose they dropped from 330 to 275 employees in the meantime? (I won't say anything about rats and sinking ships.)
Now why do I just bindly assume in SCO speak that "way under 10 percent" actually means 9.81%? Because if it were under nine percent, they would have said "way under nine percent!". So instead of laying off 27, they could have laid off 26 (9.45%) or laid off 5 (9.09%), in which case my above quackulations would need adjustment.
The price of freedom is eternal litigation.
Baystar has what, $80 million in SCO?
What? The original Baystar/RBC investment was $50 million combined, of which, Baystar's part was $20 million. RBC picked up the other $30 million. Today, RBC converted one-third of its investment into SCOX common stock. The remaining two-thirds was sold to Baystar for an undisclosed sum of money, but you can bet it's a helluvalot less than the original $20 million Baystar spent for the same quantity of Series A-1 shares in October.
To be blunt, RBC took it in the shorts on this investment. Baystar screwed them hard. Baystar hooked RBC up with the original PIPE, and then turned around and flushed the value down the toilet with their notice to SCO that they intended to get their money back. They didn't give any indication to RBC about the grounds they were using to justify their demand for the return of capital, so RBC had to stand by and watch their own deadline for making a similar demand expire.
Once that deadline passed, Baystar effectively had first-dibs on picking over SCO's carcass in an ensuing fight. RBC would have to wait until after Baystar got its money back (even though Baystar's investment was smaller) before making any attempt to recover its own investment. This forced RBC's hand. They could sit around and watch their entire $30 million get flushed down the drain, or they could sell (at a loss) most of their investment to Baystar and convert the rest to common stock (at a price that's nearly 2.5x the market price for those common stock shares) in the hopes that they'll get something if SCO wins the lottery.
Unless RBC never expected to make money on this deal for some obscure tax benefit, they got hosed badly. I'd expect to see the idiot at RBC who signed off on this deal resigning very soon to "pursue other opportunities."
Baystar, meanwhile, doubles their position in SCO's Series A-1 convertible preferred stock for a sum that's almost certainly a lot less than the $20 million they paid for the other 20,000 shares, thus reducing their average share price and giving them an ironclad fist around SCO's throat.
Baystar's not as stupid as we originally thought. RBC, meanwhile, comes off looking much stupider than we originally thought.
This might be poignant, but at least if I were to murder someone and the news media were reporting on it they would say "...an alleged murderer"... Why can't they say "alleged intellectual property rights" as SCO hasn't proved anything yet and there is still doubt here.
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SCO... An alleged company with an alleged business plan.