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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.
He said BayStar had reached "the conclusion that SCO should focus its resources on its most valuable asset: its intellectual property claims."
I'm sorry, which intellectual property claims were those?
Does Baystar believe their claims of their source code in Linux are meritable?
The strange thing about SCOX stock is the volume is very tiny.
Today it was 64,035. That's about the equivalent of 2 day-traders flipping the stock back and forth.
What does that mean? Nobody is interested in buying or selling this thing.
Although it starts amongst joyous meadows and cheerful flowers, truly great evil this path leads to. Evil bearing names like Abu Gharib and My Lai.
So just note that it was Royal Bank who against all common sense invested in SCO in the first place. They are just now growing cold feet and preparing to run for the door.
I also deal heavily with RBC and almost did switch banks. I stayed with them only because they gave me the best service. However I did shuffle my mutual funds to non-sco funds and was clear about my reasons for doing so. At this point I am just relieved that RBC is no longer involved in this mess .
I dunno, being litigious bastards makes a disturbing amount of sense from a purely business perspective.
Litiguous bastards:
1. Don't need customers, just people to sue.
2. Don't need to keep good customer relations, just to maintain enough paperwork to sue (former) customers.
3. Don't need to support a product.
4. Don't need to develop a product.
5. Don't need extensive infrastructure. Or an office for that matter, just a desk in a law firm. (Or, take the Simpson's Approach: "Hey, you, get out of my office!" - Lionel Hutts to Homer Simpson, lying in a tipped-over phone booth)
6. Don't need a lot of capital, just enough to keep the lawyers going until the 'big payoff' comes in the form of a win/settlement.
Basically, it flies in the face of almost every rule in the business book. You get to make money without doing anything productive towards the economy (no job creation, no product in use, no VALUE). And, of course, this is why litigious bastards MUST fail. We can't get people believing that the world can run off of bullshit and hot air. If you make money, you should make money by DOING something, at least in the bigger picture.
Even other companies that make money from 'IP' (say, music or software) puts out something for people to use/consume/enjoy/work on. Litiguous bastards don't contribute to the economic equation, they try to rob it, try to leech it dry.
SCO must be ground into the dust, same as RAMBUS.
"Can't shake the Devil's hand and say you're only kidding."
This is neither a flame nor usual SCO bashing.
My impression of SCO was it was the product you bought 10 years ago because that power accounting and database software was written for it, dated but does the job and has never rarely failed. Near as I'm aware, they had a somewhat stable customer base, and while they didn't inovate, they started to incorperate much in the way of OSS in order to keep up with the pack, and perhaps actually get some new customers. Selling them old old and true power apps, but save them lots of money by giving them Samba.
I am curious about one thing. What if SCO never fired the first shot in this IP war? Would they still need to downsize? Would they still be considered a dying company? Would it be possible for SCO to continue to exist supplying to main stream folk or would they have simply continued to fade away? After all a successful company isn't always the one with the most money, but one which has found a balance between supply and demand, much easier with a software company then one which produces a physical product.
There is no sanctuary. There is no sanctuary. SHUT UP! There is no shut up. There is no shut up.
"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."
And this might explain why BayStar wants Darl out and for it to essentially (if not actually) drop it's Unix products and "concentrate" on the supposed IP holdings and litigation.
One of the cheif gripes of the Linux community (other than the initial claims that SCO owns Linux) is that both SCO Linux and Unix products used Open Source software, Apache for instance (as well as a host of other things). So if SCO has no product then your contention may be on spot, as far as not being in a position to fend off counter claims regarding what's in SCO Linux/Unix. If you don't have a product and just have a lot of IP patents then you may be correct.
However, BayStar may have ulterior motives behind their request for a refund - such as we've just mentioned. But it may be in a position to milk SCO for all it's worth and then bail out. The Bank of Canada is essentially clearing a path to bail out as well IMHO. Bottom line, considering the recent layoffs as well, is that SCO is most likely scrounging for cash. What like lawyers are cheap? They aren't getting any revenue from the license/extortion scheme, they aren't selling a product, they have been black listed by almost (if not all) developers (save those that may still work there - do they still employ any devs?)and essentially have not other revenue channels.
Let's face it. SCO could potentially drag this out for years. But they need money and aren't making any at the moment. They did get a reprieve via Baystar/PIPE/BOC but that appears to be teneous at best. I think that in 6 months SCO well start to exhibit Cheyne-Stokes breathing - aka the death rattle. The stock was down to around $6/share yesterday and dropping (check that, I just checked again and it's at $5.99/share and falling). Any takers on how long before SCO stock is hovering around the price it was before they started they fiasco? I thought not.
This should be a wake up call for F/OSS. Watch the code base and keep it clean (though most are already painfully aware of this). The big question is what the hell do we do about the USPTO. They are out of touch and really not geared for handling the wave of technology advancements to date and unable to keep up with the breakneck speed of development and changes. I mean for crying out loud they gave M$ a patent on an Apple - not as in MAC but as in fruit to eat. They claim it was a mistake but it begs the question - what else "don't" they get? And I wonder if SCO and friends are banking on the Judges and Juries in the same manner - hoping they don't "get it" in order to "educate" them the SCO way.
But of course they appear to be doing with the IP litigation what they did with their software business - that is to run it into the ground with a flaming wake of burned bridges behind them.
Ok, so while there is some short-term negative publicity around one major investor bailing, it leaves Baystar capital with much more power over SCO. It's widely conjectured that Baystar's recent abortive bailing-out was actually just a public slap to SCO to get them to make some executive changes. Now Baystar's leverage is increased substantially. It has occurred to myself and to others that what Baystar may be able to do is effectively "foreclose" on SCO - not in the traditional debt sense, but they'll be able to stick a gun to SCO's head and force them to replace board members under threat of Baystar's pulling out, which would effectively bankrupt SCO. Round one - replace the CFO. Round two - put some of our buddies here on the board to provide you with some sage advice.
Then we have Baystar (the Microsoft puppet) effectively inheriting all of the IP claims (by proxy, but the result is the same), which they think are meritorious. This could result in a whole new round of litigation run by someone who's not a complete jackass.
The new litigation may (will)also be a complete pile of bullshit, but it still ties things up in the courts for years. Be afraid, very afraid.
Help save the critically endangered Blue Iguana
It was SCO that kept begging for more time, SCO that kept offering cumbersome, insufficient responses, SCO that kept showing up at deadlines empty-handed, SCO that came up with every excuse it possibly could to never actually be in a court room. IBM has quietly bided its time, patiently giving SCO all the rope it ever wanted. And now, precisely as expected, they hang themselves.
It shouldn't be difficult to counter the spin when the facts are on your side.
Please state your sources every time you claim a fact!!!!
According to the RBoC stock coversion, SCO has a business presence in 82 countries with a network of 11,000 resellers and 4,000 developers. While the 11,000 resellers are solution providers, and their developers when dubbed developer network is listed as 8,000 in number, I haven't seen any actual "employees" numbers anywhere.
You use nothing more but a vague "good" to describe a well-performing economy. That's just pathetic.
Consumer debt load is at record high, including mortgage debt. According to the same source (USATODAY), "household debt levels rose nearly 11% in 2003" alone!!! This does not tell good things about household balance sheets. In fact, consumer debt levels reveal what the balance sheets wouldn't. In this case, they tell you how sh*t-fscked the Americans got, living today on money they will earn tomorrow for years now and it can't get better.
And when was the last time you checked the 2003 record-high $380 billion dollar deficit.
I am not opposing the fact that the economy doesn't suck. But you have not shown it and made close to zero effot (only concrete unemployment numbers)!! You have to know your facts and know what makes a good economy first.
I will conclude my point by reiterating the fundamentals. I said it once, I'll say it fscking again: State your sources!!!
They've just managed to half their money with this deal, rather than try to get blood out of the SCO stone they're converting to common stock which they're entitled to do, but if you look at the numbers each $1000 preferred share becomes several shares of common stock valued at around $440. Excuse me for finding this hillarious. They thought they could make a quick buck by funsing a viscious and meritless intellectual property attack on IBM and the Linux community in general. Now they're paying the price. I just hope SCO stock tanks some more before these Canadian vultures can cash out.
As for Baystar trying to get blood out of the stone they helped forge, same story, let's hope they never recoup their cash. Maybe it'll be a lesson to the next bunch of greedy S.O.B.s who think about funding the next group of crooks to come along.
SCOX closed at 6.01 on Thursday and 5.99 on Friday. That does look like an effort to maintain the price.
This only works until SCO runs out of cash, of course.
They made this announcement after trading hours on Friday, and they already closed below $6 today. If you have a stock tracker, set it to watch SCOX on Monday morning when the market opens. They will easily lose another $.50 by the end of next week. Also, it will be interesting to see how many of the board members quietly dump stock in after hours trading this weekend. Half of them notified the FTC that they would be cashing in stock in small increments. I am betting those increments add up to 150,000 common shares this weekend.
My friend (the evil capitalist) has said that this has always been a race between winning the legal cases, and the stock hitting the magic $4.50 share price when the market figired out the scam. At $4.50, there would likely be a removal of The Darl and his cronies and a cancellation of all court cases and a demand for a new CEO to turn SCO around by INNOVATING instead of LITIGATING. I am watching to see if he's right. See you Monday!
"Curiosity killed the cat, but for a while I was a suspect."- Steven Wright