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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.
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.
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
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.