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SCO and Baystar Strike a Deal

Posted by michael on from the know-when-to-fold-em dept.

comforteagle writes "As you'll no doubt recall, SCO financier wanted to cash-in on its stock because of how SCO was being run. It appears they've struck a deal. 'The SCO Group, Inc. today announced it has entered into an agreement with BayStar Capital II LP to repurchase and retire all 40,000 shares of Series A-1 Convertible Preferred Stock currently held by BayStar.'" Summary: Baystar and the Royal Bank of Canada invested $50 million in SCO in October 2003. In 6 1/2 months, they've now converted their investment to $13 million in cash and $13.7 million of common stock, for a loss of almost half their investment.

7 of 336 comments (clear)

  1. Ha ha! by BWJones · · Score: 5, Insightful

    In 6 1/2 months, they've now converted their investment to $13 million in cash and $13.7 million of common stock, for a loss of almost half their investment.

    Nelson: Ha ha!

    Seriously though. This should be a lesson to VC funds and financing operations that finance companies whose business models are built upon legal action and sucking off the hard work and sweat of people who make ideas work through the creation of products that improve our lives. These companies based on litigious action are typically fairly sleazy operations and will not generate any "good will" for the financing operations or companies.

    I personally would much rather support and fund (and yes, even make money from) companies who are out there to make a difference. Work to make something new or make a difference rather than prostituting yourself for mere money and parasitizing off of others hard work and insight.

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    1. Re:Ha ha! by hopethishelps · · Score: 5, Insightful
      i run back to enjoy my commodity hardware...i guess i have to thank windows for that


      Absolutely not.

      The concept of the personal computer was popularized by Apple with the "Apple ][" and Dan Bricklin's spreadsheet, Visicalc. For the open architecture PC, we have to thank IBM and the companies who figured out how to write a legal BIOS: Compaq and Phoenix. IBM later tried to close the architecture by introducing a patented I/O bus, and we have to thank a group of PC makers, led by Compaq, who had the collective balls to stand up to IBM in the marketplace. That's what, and who, gave us the commodity open-architecture PC.

      All this happened before Windows had any significance. Windows had little market share before version 3.0 came out.
  2. some is better than none by lawngnome · · Score: 5, Insightful

    Getting some of their money is better than losing it all when sco gets their ass handed to them.
    Next time I would suggest in doing more research...

  3. Somehow by FS1 · · Score: 5, Insightful

    I would call this poetic justice, but since we all know the money came from microsoft originally. A loss of about 24 million dollars is nothing to them.

    What is really sad here is that people who could do something about activities like this Baystar/SCO/Linux/Microsoft/Sun/IBM/etc debacle don't care.

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  4. Re:You think it's funny, but actually ... by GigsVT · · Score: 5, Insightful

    It's not screwing anyone. It's a standard hedge. It reduces the holders profit potential, but it lessens risk since it basically locks in the shares at the short price.

    The only way you could ever consider this screwing anyone is when SCO initially issued the convertibles... convertible debentures and convertible preferred and the like dilute the stock, the same as any other stock issue, it's just that convertibles dilute the stock in ways that might be subtle for the beginning investor. (The dilution isn't immediate).

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  5. SubGenius fodder for sure by Weaselmancer · · Score: 5, Insightful

    You know the joke about the whole SubGenius thing..."If you're so smart, why aren't you rich?"

    Here is a prime example of why we are all SubGenii. We all knew that SCO would tank. We had a golden opportunity to make some serious cash. And you know what? I'll betcha not a single person on all of Slashdot cashed in on these fools. Damn.

    It's not often you have a sure thing in a horse race. And I just missed mine. Double damn.

    Weaselmancer

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    Weaselmancer
    rediculous.
    1. Re:SubGenius fodder for sure by Anonymous Coward · · Score: 5, Insightful

      Shorting is a big risk. When you buy a stock your potential losses are limited to your initial investment. When you short a stock your potential losses are unlimited. This is why I did not short SCOX, I was afraid someone like MS would buy them out, and then I'de be screwed. There is no such thing as a sure thing.