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SCO posts Q2 Loss, Gets $11k from Linux

Paul Hands sent us linkage to SCOs Q2 Financials. "The highlights are that SCOX only collected $11k (yes, K) for that much-discussed license for EV1 and other Licensees. Cost of that $11k was well over $4M. Overall, revenue was just over $10M, and they made a net loss applicable to common stockholders of $14,959,000, or $1.06 per diluted common share." Update According to the SCO conference call, this isn't accurate.. their Linux extortion income will be listed in the Q3 financials.

150 of 459 comments (clear)

  1. And the best bit is... by Simon+Brooke · · Score: 3, Insightful

    <quote> a charge of $2,139,000 related to the impairment of goodwill and intangible assets </qoute>

    --
    I'm old enough to remember when discussions on Slashdot were well informed.
    1. Re:And the best bit is... by FuzzyDaddy · · Score: 5, Funny

      They still have $6,767,000 worth of goodwill - I guess they didn't subtract out the badwill.

      --
      It's not wasting time, I'm educating myself.
    2. Re:And the best bit is... by joeldg · · Score: 4, Insightful

      and if they keep heading down down down the DOW tube, they just might be de-listed by the end of the year :)

      Would that not be perfect.

    3. Re:And the best bit is... by cynic10508 · · Score: 5, Funny

      How about a business karma modifier?

    4. Re:And the best bit is... by harrkev · · Score: 2, Interesting

      There was talk a year ago about SCO hoping to be bought out by IBM as a result of the suit...

      Wouldn't it be awesome if, once this company is reduced to ashes, IBM were to buy them out for only a million or two (chump change for IBM). They would finally own ALL of the rights to Unix. Then, they could open-source the whole thing! THAT would be cool!

      --
      "-1 Troll" is the apparently the same as "-1 I disagree with you."
    5. Re:And the best bit is... by CrazyLion · · Score: 5, Informative

      Just to clarify. Goodwill in this case is an accounting concept referring to accounting treatments of premium paid in a merger. Until fairly recently Goodwill used to be amortized (i.e. company would write it off over time). Under new rules, it's carried indefinitely and assessed for impariment. According to SCO's March '04 10-Q, most of their goodwill comes from acquisition of Vultus, Inc. Not very much related to the loss of face in the Linux debucle.

    6. Re:And the best bit is... by AndroidCat · · Score: 5, Funny
      They still have $6,767,000 worth of goodwill - I guess they didn't subtract out the badwill.

      Ah, then obviously they're listing the gross goodwill. I doubt they have any net goodwill at all.

      --
      One line blog. I hear that they're called Twitters now.
    7. Re:And the best bit is... by HungWeiLo · · Score: 5, Funny

      And to clarify further: Goodwill is where you will find SCO stock certificates in about 6 months. They will be used to wrap fragile pottery and dinner plates, so they will not break on the way home.

      --
      There are a huge number of yeast infections in this county. Probably because we're downriver from the bread factory.
  2. You varmints! It's Yosemite Darl! by i_want_you_to_throw_ · · Score: 5, Funny

    Yosemite Darl is the meanest, toughest, rootin-est,tootin-est cowboy there ever was and you should be ashamed of yourself for rustlin' away his code, pardner. Why its getting so a man can't earn a dishonest livin no more.

    Now let's all sing with Darl (while reading the SCO finances) ... "I can't get a long little dogey, I can't even get one that's small, I can't get a long little dogey, I can't get a dogey at all". (Profuse apologies to Yosemite Sam)

    1. Re:You varmints! It's Yosemite Darl! by Eggplant62 · · Score: 4, Funny
      Yosemite Darl is the meanest, toughest, rootin-est,tootin-est cowboy there ever was and you should be ashamed of yourself for rustlin' away his code, pardner. Why its getting so a man can't earn a dishonest livin no more.

      Now let's all sing with Darl (while reading the SCO finances) ... "I can't get a long little dogey, I can't even get one that's small, I can't get a long little dogey, I can't get a dogey at all". (Profuse apologies to Yosemite Sam)


      I put up a fixed copy of that photo here.

      Bad cowboys who rustle cattle then try to blame someone else for it shouldn't go around wearing white hats.
    2. Re:You varmints! It's Yosemite Darl! by the+MaD+HuNGaRIaN · · Score: 3, Funny

      For a second there, I thought you posted a picture of a HORSES ASS.

      Er, wait a minute......

    3. Re:You varmints! It's Yosemite Darl! by markov_chain · · Score: 3, Informative

      You are joking, but you're not far from the truth: quoting a Washington Post article Showdown with the Linux gang (use foobarian@foo.com/foobar to log in):

      "We went out one day and our Unix cows were missing," McBride said he told his father in trying to explain the case to him. "We looked in the Linux pen, and there's a bunch of them in there that have our brand on them . . . in this case the copyright. Someone took our cows and we want 'em back -- it's as simple as that."

      Yeehaw!

      --
      Tsunami -- You can't bring a good wave down!
    4. Re:You varmints! It's Yosemite Darl! by asr_man · · Score: 4, Funny

      Sheesh, even the horse looks embarassed to have its picture taken next to him.

    5. Re:You varmints! It's Yosemite Darl! by cosmo7 · · Score: 5, Insightful

      I guess it would have been harder for him to have told his father this:

      "We went out one day and noticed that no one was buying our cows because everyone was getting free cows. So we went over to where the free cows were and accused the free cow people of stealing our cows because they had horns and udders just like our cows. We want $699 per cow. Then it turned out that the cows aren't related but we had a showdown with the IBM boys because they had bought our cows in the past and had made bells for them and they were putting similar bells on the free cows. In the meantime it turns out that our cows don't actually belong to us, but to Mr Novell, who pays us to look after them -- it's as simple as that."

    6. Re:You varmints! It's Yosemite Darl! by zonix · · Score: 2, Funny

      "But look! There, in the distance! It's RMS assembling his herd of gnus! Oh darn, looks like a gnu is getting away again. Well, some day." :-)

      z
      --
      What would an EWOULDBLOCK block, if an EWOULDBLOCK could block would? -- me
    7. Re:You varmints! It's Yosemite Darl! by AviLazar · · Score: 2, Funny

      A face only a mother could love.

      --

      I mod down so you can mod up. Your welcome.
    8. Re:You varmints! It's Yosemite Darl! by grendelkhan · · Score: 3

      That, sir, is genius.

      --
      Wu-Tang Name: Half-Cut Skeleton Get your own Wu-Na
    9. Re:You varmints! It's Yosemite Darl! by Dyolf+Knip · · Score: 2, Funny
      A face only a mother could love.

      ... and she died of fright.

      --
      Dyolf Knip
  3. No improvements forecasted by Mz6 · · Score: 5, Interesting
    After reading CNET's version of this story (which also gives a good summary on what SCO is doing). SCO's forecast for next quarter doesn't really improve on last ones. The article states that this quarter (ending 31 July) SCO only expects revenue to fall between $10-12 million. But my favorite part of the article was this nice little blurb at the very bottom.

    "The company also announced on Thursday that it had notified the Berlin-Bremen, Stuttgart and Frankfurt Freiverkehr stock exchanges that its ticker symbol had been listed without the company's permission. SCO is asking the exchanges to remove the symbol."

    What's next? CNET gets a "Cease & Desist" letter from SCO because the company's name was used in this story?

    --
    Hmmm.
    1. Re:No improvements forecasted by daedelus7183 · · Score: 3, Funny

      What's next? CNET gets a "Cease & Desist" letter from SCO because the company's name was used in this story? Most likely. And anyone here who comments on the story. And our families, ex-girlfriends, people with the same last names....

      --

      -----

      The monkeys have eaten my brain! The Monkeys, I say!

    2. Re:No improvements forecasted by garcia · · Score: 5, Funny

      What's next? CNET gets a "Cease & Desist" letter from SCO because the company's name was used in this story?

      Nah, Slashdot is next because their users are expressing negative opinions that haven't been proven in court and they are the reason for the decline of SCOX stock.

    3. Re:No improvements forecasted by pegr · · Score: 4, Funny

      Cnet snippet: "As customers go from Unix to Linux, Cornett said, SCO's business is falling off at twice the pace of other software, like Novell's NetWare, a Unix derivative."

      Holy crap! NetWare is a UNIX derivative! Now there's one outta left field! ;)

    4. Re:No improvements forecasted by Mysticalfruit · · Score: 2, Funny

      Next they'll be claiming UNICS was a SCO derivative...

      --
      Yes Francis, the world has gone crazy.
    5. Re:No improvements forecasted by pegr · · Score: 3, Informative

      "Stop living in the Slashdot bubble - most people don't know that NetWare is a derivative of Unix, and even more people don't know what NetWare *is*."

      Um, dude, NetWare is definately not a UNIX derivative. (Though at one time, you could run NetWare under UNIX. Remember UNIXWare?) They did steal a lot of low-end business from UNIX vendors, especially at the low-end. My comment was meant as a joke. (Who'da thunk it would be modded "Informative"?)

    6. Re:No improvements forecasted by Tackhead · · Score: 4, Interesting
      > > "The company also announced on Thursday that it had notified the Berlin-Bremen, Stuttgart and Frankfurt Freiverkehr stock exchanges that its ticker symbol had been listed without the company's permission. SCO is asking the exchanges to remove the symbol."
      >
      > What's next? CNET gets a "Cease & Desist" letter from SCO because the company's name was used in this story?

      Actually, there's something more ornery going on than that.

      A lot of US companies are popping up on German exchanges without the companies' knowledge or consent. It's a cheezy hack to get around US securities laws. Google for "naked short selling german exchange".

      When you sell shares short, your broker is supposed to lend those shares to you so that you can sell them. (When you cover the short, you buy the shares on the open market and hand them back over to your broker). To sell a stock short without borrowing shares is called "naked short selling", and has been against NASDAQ regs for a while. As of April, more regulations went into effect in to prevent the practice.

      The underlying principle is that you can't sell what doesn't exist. That's why your broker has to have some of those shares kicking around and be willing to loan them to you. If you can sell shares that don't exist, you can use that capability to manipulate the market in either direction.

      Although I think SCO (the company) isn't worth a load of foetid dingo's kidneys, I wouldn't want to have a position in SCOX (the stock) either way - and that goes double given the ludicrously small float and high potential for manipulation.

      But for once -- probably for the first and last time in their corporate history -- the litigious bastards who make up SCO are actually doing the right thing when they ask these exchanges to delist them.

  4. How much longer can this last? by jeffbruce · · Score: 3, Insightful

    It should not take too many more quarters like this to put an end to this nonsense.

    1. Re:How much longer can this last? by evenprime · · Score: 2, Insightful

      Now we just need to make sure the public remembers who bankrolled this affair.....

      --

      "Weapons should be hardy rather than decorative" - Miyamoto Musashi
      I think that goes for OS's too
    2. Re:How much longer can this last? by Anonymous Coward · · Score: 2, Insightful

      No!

      The entire purpose for SCO is just to intruduce fear uncertainty and doubt about the Linux business model until Longhorn is released. If Longhorn wasn't taking so long, Microsoft probably wouldn't have had to resort to this front. As long as a company sees chaos in one business model and stability in another, the PHB's are more likely to take the stable model because they are risk averse (even though the benefit could be significant--but noone has ever been fired for using IBM^H^H^HMicrosoft, right?).

    3. Re:How much longer can this last? by Amiga+Trombone · · Score: 2, Insightful

      It should not take too many more quarters like this to put an end to this nonsense.

      That's probably true.

      Of course, then you have another problem. Who's going to wind up with the Unix IP rights after SCO's demise?

      Depending on how their assets are liquidated, someone even worse than Darl and Co. could get hold of them.

      Be careful what you wish for, you just might get it.

    4. Re:How much longer can this last? by Curtman · · Score: 2, Funny

      in units of 1/0000ths on ebay

      ERROR: division by zero. Terminating witty comment attempt.

  5. Watch... by JoeLinux · · Score: 5, Funny

    Darl's going to turn around and claim that this is proof that the Linux Business models don't work.

  6. Well, they got.. by bl4nk · · Score: 5, Funny

    SCOwned.

  7. If they have Q2 losses... by kpansky · · Score: 5, Funny

    If SCO is having Q2 losses, maybe they should upgrade to Quake 3, or at least get a new videocard.

    --

    --Kevin
    1. Re:If they have Q2 losses... by Short+Circuit · · Score: 2, Funny

      Yeah...you know they can't work with an open-sourced engine. :)

  8. I'l only say this once.. by Anonymous Coward · · Score: 2, Interesting

    AH HAHAHAHAHAHHA

    With all the recent news (mostly covered by Groklaw) about what is going AGAINST SCO, I would REALLY REALLY like to see what they have going FOR them. Why would peopel invest in a company who seems to be determined to implode on themselves.

    So far everything I've seen says they don't have a hair to stand on in their case against IBM, DO they have anything?

    1. Re:I'l only say this once.. by CDS · · Score: 4, Funny

      Here's a list of what they have going FOR them.

  9. SCO dead pool by nate1138 · · Score: 2, Interesting

    Time to start up the SCO dead pool. What date do you predict that they will run out of money and implode?

    --
    Where's my lobbyist? Right here.
    1. Re:SCO dead pool by tntguy · · Score: 5, Funny

      Midnight, January 1, 1970

  10. Keeps going and going and going and.. by Pahalial · · Score: 3, Informative

    "Expenses associated with our SCOsource division are anticipated to continue at approximately the current level as we continue to protect our UNIX intellectual property and aggressively pursue our legal claims through the court system."

    Ohhhh boy. Better get comfortable people, there's going to be yet more SCO stories for a while.

    --
    Stuff.
    1. Re:Keeps going and going and going and.. by Short+Circuit · · Score: 2, Insightful

      Assuming the ruling goes against them, you know they'll appeal. Even if it doesn't, IBM will.

      I don't think they have the money to follow through all the appeals.

    2. Re:Keeps going and going and going and.. by hackstraw · · Score: 2, Funny

      Ohhhh boy. Better get comfortable people, there's going to be yet more SCO stories for a while.

      Not by my calculations. It should only take another four months or so.

    3. Re:Keeps going and going and going and.. by Jahf · · Score: 2, Insightful

      Doesn't mean the appeals will die. There are any number of firms that are willing to pick up dead companies for next to nothing only to continue their legistlation in the hopes that a small portion of these investments will pay off.

      I expect some version of SCO's cases will be in the system for 5+ years.

      --
      It is more productive to voice thoughtful opinions (reply) than to judge (moderate) others.
  11. article. by abscondment · · Score: 5, Informative
  12. SCO nees to work a bit harder by bpland · · Score: 5, Funny
    I know i'm enjoying watching this all end.

    From SCO Keeps SinkingThu Motley Fool
    "Management blamed the slow sales on a "lack of SCOsource licensing revenue." SCOsource is the Linux users' shakedown program. Apparently, no one is paying up. It took in $11,000 last quarter. That's not a typo. President and CEO Darl McBride paid more lip service to "increasing shareholder value," but you really have to wonder about the viability of his vision when his firm's most engrossing initiative brings in less money than the guys who mow lawns in my neighborhood."

    rofl :)

    1. Re:SCO nees to work a bit harder by Anonymous Coward · · Score: 2, Interesting

      Also from the article:

      "By the way, McBride was paid more than $1 million last year -- most of it in cash -- to preside over
      this impending disaster."

      Sadly, I think Darl is rofl too.

    2. Re:SCO nees to work a bit harder by Anonymous Coward · · Score: 2, Interesting

      ...But the firm made more money than the 'firm' of the guy who mows lawns.

      All I'm saying is Darl and crew made considerably more salary than lawnmower guy, and that's why they're still at it. Keep an eye on the silly monkeys, folks. Keep wondering why there have been no investigations on behalf of shareholders.

      And should there be? What about freedom to invest in what you damn well please? Is stock regulation all that different from requiring registration and certification of programmers?

      Just putting that out for thought. I'm appalled Darl and crew do all this without fear of jail, but that in turn does reasonably question why I'm more libertarian about software.

      And jeeze, it's an SCO article. Gets harder each time to find something chewy to discuss about it. That's the best I can do on first coffee.

    3. Re:SCO nees to work a bit harder by mangu · · Score: 2, Interesting

      Funny thing is, someone got a discount. $11000 = 15 * $699 + $515. Or did someone at SCO walk away with $184?

    4. Re:SCO nees to work a bit harder by pizza_milkshake · · Score: 3, Funny
      "...his firm's most engrossing initiative brings in less money than the guys who mow lawns in my neighborhood."

      extortion just doesn't pay like it used to.

    5. Re:SCO nees to work a bit harder by Specter · · Score: 2, Funny

      Please try to pay attention...the missing $184 was obviously stolen by Linux.

  13. This might be Modded Funny, But... by Ieshan · · Score: 5, Funny

    I mean, this post might be modded funny, but I swear, I didn't make it up. It's right out of the article.

    "Our revenue for the second quarter was consistent with our expectation and we also incurred significant expenses for the impairment of goodwill and intangibles and for the exchange of our Series A-1 Convertible Preferred Stock. Both of these charges negatively impacted our second quarter results," said Darl McBride, President and CEO. "As the company looks forward to the last two quarters of fiscal year 2004 we are committed to increasing shareholder value through profitable operations and increasing cash flow from our UNIX division as well as remaining focused on our intellectual property lawsuits and licensing strategies."

    Sometimes you don't even have to try to make a funny post, because the dialogue you'd put in Darl's mouth is actually less funny than his own idiotic ramblings.

  14. Gotta love the Motely Fool by ukalum · · Score: 2, Informative
    Management blamed the slow sales on a "lack of SCOsource licensing revenue." SCOsource is the Linux users' shakedown program. Apparently, no one is paying up. It took in $11,000 last quarter. That's not a typo. President and CEO Darl McBride paid more lip service to "increasing shareholder value," but you really have to wonder about the viability of his vision when his firm's most engrossing initiative brings in less money than the guys who mow lawns in my neighborhood. By the way, McBride was paid more than $1 million last year -- most of it in cash -- to preside over this impending disaster.

    Read more

  15. Re:I Suppose Bankruptcy by daedelus7183 · · Score: 3, Funny

    What, and lose all that comic relief?

    --

    -----

    The monkeys have eaten my brain! The Monkeys, I say!

  16. My favorite quote by Anonymous Coward · · Score: 5, Insightful

    From a similar article

    "A legal victory looks highly unlikely, and even if a decision went SCO's way, the probable remedy would not be money for SCO, but a rewrite for Linux, something the open-source community would accomplish in the blink of an eye."

    1. Re:My favorite quote by zurab · · Score: 4, Funny

      One more quote:

      At 5 bucks a share, with almost nothing available to short, SCO isn't worth much of your investing effort. But it's definitely worth watching, if only as an example of the way a company can be run into the ground, taking investors along.

      I guess they stopped short of recommending /. as your technology investment resource.

  17. Unauthorized listing: by SLot · · Score: 4, Insightful

    The listing appears to be part of an effort by domestic and foreign brokers to circumvent recent National Association of Securities Dealers (NASD) and U.S. Securities and Exchange Commission (SEC) restrictions against so called "naked short selling." Naked short selling involves groups of people working together to manipulate the market by selling fictitious shares of stock in an effort to force a company's share price to go down. Not that I care.

    By listing the Company's common stock on the Exchange, market manipulators sought to benefit from an "arbitrage" loophole that none of the present regulations was designed to close.

    1. Re:Unauthorized listing: by dekeji · · Score: 3, Informative

      Naked short selling involves groups of people working together to manipulate the market by selling fictitious shares of stock in an effort to force a company's share price to go down. Not that I care.

      As far as I can tell, naked short selling just means that you make a short sale but don't have the securities to back it up.

      Market manipulation means that you deliberately try to affect the value of a price through your actions. Even if they are harmful to SCO's stock, I don't see why naked short sales of SCO necessarily represent an attempt to manipulate the market. In the case of SCO, it may just mean that people believe they know that it will go down further because of SCO's business practices (I sure am) and want to profit from their knowledge, but that they can't make a short sale any other way.

    2. Re:Unauthorized listing: by conway · · Score: 2

      This seems to be exactly the case!
      The short as % of float for SCOX is 60% while its something around 1-2% for normal companies.
      Looks like investors are desperately trying to short this stock.

    3. Re:Unauthorized listing: by trixillion · · Score: 3, Interesting

      large short to float ratio will cause high instability. it makes the market ripe for short squeezes. It is possible that a great many people who are short SCOX will lose their shirts even as the company collapses. The markets are an unfriendly beast.

  18. They've lost another quarter... by jd · · Score: 3, Funny

    ...at this rate, they won't have any quarters left for the slot machines.

    --
    It's a small world and it smells funny; I'd buy another if it wasn't for the money; Take back what I paid (SoM)
  19. 15 copies by JohnGrahamCumming · · Score: 5, Funny

    Wow, at $699 a go, they managed to license 15 copies!

    Go SCO!

    John.

    1. Re:15 copies by Stray7Xi · · Score: 4, Funny

      All bought by one person. Who after SCO goes into bankruptcy is going to put the licenses on eBay and sell them at $1000 each!

    2. Re:15 copies by gcaseye6677 · · Score: 4, Funny

      When the EV1 deal was first announced, an SCO exec described the price tag being in the 7 figures. I guess that includes the decimal numbers ($11,000.00).

  20. No one is scared anymore by Ars-Fartsica · · Score: 4, Interesting
    Since it has become clear that SCO is unwilling to ratify its claims in a court of law (if it were so willing it would be in court already, not seekign further delays), I don't think anyone really believes the threats have teeth anymore.

    In any case the ploy was a success - the goal was never to increase SCO revenue, but to bolster the stock price so execs could sell. The issue now is whether this will be investigated as a pump-and-dump scam that Darl and co knew from the outset had no basis in law. Don't scoff Darl - you still may end up in the cell block with Worldcom and Enron execs.

    1. Re:No one is scared anymore by kakos · · Score: 4, Insightful

      End up in a cell block with Worldcom and Enron execs? Last I hear, they were still living in their mansions. I'd like to go to jail if that is the kind of cell block I get.

    2. Re:No one is scared anymore by leoxx · · Score: 2, Interesting

      Increasing stock value was part of it, but part of it as also to introduce a huge amount of fear into the marketplace over the use of Linux. That is, in my opinion, why both Microsoft and Sun were so willing to buy such expensive "licenses" for stuff they didn't even need.

  21. Shocked! by Marc+Desrochers · · Score: 5, Funny
    I wonder what all the people who believed in their Linux licensing plan are thinking right now.

    Maybe we should ask him...

    Bill, what do you think?

  22. Re:Progress report by e9th · · Score: 3, Interesting

    They'll get infusions of money from anti-FOSS interests until they lose in court and all their appeals have been exhausted.

  23. Weird... by GillBates0 · · Score: 5, Funny
    I don't see the expense figures for crack/weed listed there. Maybe it's included under "Amortization of intangibles " or "Operating expenses".

    Hope Darryl clarified on this during their 11am EDT conference today.

    --
    An Indian-American Hindu committed to non-violent thought/speech/action alarmed by the global explosion of radical Islam
    1. Re:Weird... by dipipanone · · Score: 2, Funny
      I don't see the expense figures for crack/weed listed there

      That would be this bit:
      "we also incurred significant expenses for the impairment of goodwill and intangibles"
      We're talking about some serious impairment going on here -- over a million pounds worth of impairment, in fact -- and it's had a seriously negative impact on their goodwill with everyone except their drug dealer.
    2. Re:Weird... by jb.hl.com · · Score: 2, Funny

      Hey, that's offensive.

      Crack smokers make sense. SCO doesn't.

      --
      By summer it was all gone...now shesmovedon. --
  24. Obligatory Monty Python by deutschemonte · · Score: 2, Funny

    And then there was much rejoicing...yeah!

    --
    The preceding message was based on actual events. Only the names, locations and events have been changed.
  25. Text is wrong, this quarter does not include EV1 by Anonymous Coward · · Score: 5, Informative

    During the conference call earlier in the day, SCO stated that the EV1 revenue was not included in this quarter, and will start showing up in Q3.

  26. Re:11k! by drinkypoo · · Score: 2, Funny
    If it were 2^10 it'd be ki.

    Is it just me or is it amusing that the story says "$11k (yes, K)"? That's "Eleven thousand dollars (yes, Kelvin)".

    --
    "You're right," Fisheye says. "I should have set it on 'whip' or 'chop.'"
  27. It is a shame... by mikael · · Score: 2, Interesting

    If they had done something positive, like using their expertise in UNIX internals to offer device driver development for third party hardware, rather than destructive legal disputes, they would probably have made a much better profit.

    --
    Vintage computer adverts: http://www.vintageadbrowser.com/computers-and-software-ads
  28. The Motley Fool by Jaywalk · · Score: 5, Interesting
    The Motley Fool published a good article about SCO's latest quarterly results. They've been increasingly dubious about SCO's claims and this article has pretty much crossed the line to outright contempt for SCO's activities. Choice quotes include calling SCO "something of a laughingstock" and referring to SCOSource as "the Linux users' shakedown program." They have a few things to say about Darl's skills as CEO too.

    Remember, these aren't techies talking about the technical merits of the case. These are financial guys commenting about SCO's quality as an investment. It nice to see someone other than technical folk scoffing at this sideshow.

    --
    ===== Murphy's Law is recursive. =====
    1. Re:The Motley Fool by c13v3rm0nk3y · · Score: 2, Interesting

      Thanks for the pointer to the article. My fave quote:

      At 5 bucks a share, with almost nothing available to short, SCO isn't worth much of your investing effort. But it's definitely worth watching, if only as an example of the way a company can be run into the ground, taking investors along.

      Ouch. Not even recommended for a short-sell anymore. Nothing left but cash-burn.

      Remember to turn out the lights on your way out. Leave the keys at the night desk.

      --
      -- clvrmnky
  29. I'll buy em! by whitelabrat · · Score: 2, Funny

    When SCO's a worthless company, and they already are in my eyes, I'll shell out the $10 and buy 'em out. First thing I'll do is I'll move Darl's desk into the basement and change his title "GPL Promotion Assistant". If he's got a stapler... yeah... I'll just be taking that from him too...

    1. Re:I'll buy em! by ckaminski · · Score: 2, Funny

      They're obviously not putting coverpages on their TPS reports.

  30. Re:Phone Darl and congratulate him! by FuzzyDaddy · · Score: 2, Informative
    Here's his home phone number: 801-580-4767

    How handy that he has a toll free number!

    --
    It's not wasting time, I'm educating myself.
  31. Re:Progress report by funkdid · · Score: 2, Informative
    Yeah, stuff like this has a way of snowballing.

    For example, I have some company that has the potential to make sick amounts of money I just don't have the capital to make that happen. So you invest money, then more money till your out. You don't want to loose your investment so you get some other people to take a financial interest in your financial interest.

    I once worked for a Machine Shop, the owner was the world's WORST business man but people kept giving him money. I guess once you've kicked in 1 million dollars you don't want to loose it so you kick in more, and get others to kick in more. You just hope that some day it pays off. (ahem- suckers)Lucky for me I was just an employee, not the terrible owner or the sucker investors.

    --

    I boycott signatures

  32. Re:Progress report by Short+Circuit · · Score: 3, Informative

    Won't be necessary. SCO is a corporation, which means its officers are protected from legal action stemming from the behavior of the company..

    IANAL.

  33. No money left for Counterclaims! by ckathens · · Score: 2, Insightful
    Poor IBM, Novell, DaimlerChrystler, etc... Looks like there won't be any money left once the initial claims have been settled for counter-claims and any independant claims like libel, etc..

    On that note, I can certainly see why SCO took the gamble it did. The company was going to be bankrupt soon and realized that it had just a very small chance of winning any Linux suit. So if they didn't sue, they would be bankrupt for sure in 2-3 years. If they DID file suit, they at least had a chance they would win (albeit small) and save themselves from bankrupcy.... Under this view of things, they actually didn't take ANY risk since it was inevitable they would have gone under if they hadn't filed suit... Just something to think about (though I still think SCO is SCum)

  34. EV1 revenue by Col.+Klink+(retired) · · Score: 3, Interesting

    From the conference call, it seems that the EV1 revenue won't start coming in until Q3. They still say it's in the "6 figures," but less than $250K and will be spread over several quarters.

    --

    -- Don't Tase me, bro!

  35. Re:Progress report by hoggoth · · Score: 3, Funny
    They'll get infusions of money from anti-FOSS interests until they lose in court and all their appeals have been exhausted.

    Comprehensive list of anti-FOSS interests:
    1. Microsoft

    --
    - For the complete works of Shakespeare: cat /dev/random (may take some time)
  36. Not nearly enough by iamacat · · Score: 2, Interesting

    What is needed is either a lengthy prison term for Darl and a dozen other people at the helm, or an apology for unfair punishment to all the virus writers and pirates, to speak nothing of simple curious, computer-literate individuals. Recently, US justice system claimed worms cause billions of dollars in financial damage and a single song on Kazaa is worth tens of K. Well, they should really jump on this one - a rogue causing countless companies to waste money on laywers or pay for unwanted MS software.

  37. Err... by Greyfox · · Score: 4, Funny
    They do understand that you're supposed to make money right? That's when the number at the bottom of your balance sheet has a plus sign in front of it.

    I think they'd be better off if they fired all their lawyers and put the rest of their money into lotto tickets.

    --

    I'm trying to teach myself to set people on fire with my mind... Is it hot in here?

  38. BitTorrent of SCO Conference Call today. by kb8rln · · Score: 4, Informative

    Ok here is the Bittorrent of the SCO Conference Call today in mp3 format.

    http://sco.penguinman.com
  39. Re:Connections by abscondment · · Score: 4, Informative

    What you mean to say is, you have Google:

    Results for the 1 Darl McBride in Utah:

    Darl C Mcbride - (801) 424-2006 - 1799 Vintage Oak Ln, Salt Lake City, UT 84121

  40. Litigation? by Claire-plus-plus · · Score: 5, Interesting

    I seem to remember once reading that a few yeard ago Darl was the CEO of a company that sued IBM over intellectual property rights. The article stated that on that occasion IBM bought out the company and Darl received a big payout from the shareholders.

    Some people say that SCO are only attacking IBM this time in an attempt to be bought out. In fact I just found this, an open statement by Darl that he would welcome IBM buying SCO to make the problem go away: SCO's CEO says buyout could end Linux fight. I think that settles it. SCO doesn't want to win in court they don't even want to go to court, they just want to scare IBM into buying them out.

    --
    99 bottles of beer in 175 characte
  41. Stock down 9% already by Animats · · Score: 5, Insightful
    In response to the earnings report, the stock has dropped 9% today.

    The stock has been around $5 ± 0.50 for weeks. You can't short a NASDAQ listed stock when the price is below $5, so the bears drop out at that point. Trading volume has been down for weeks. SCO's concern with being listed on some additional exchanges may be that they have different rules on short positions, allowing shorting at lower price points.

    The full numbers from this quarter aren't out yet, so it's hard to figure out when they run out of cash. It looks like they have three to six quarters of cash left at their current burn rate, but that's a rough estimate. Unless they get new financing, it looks like they won't make it to the IBM trial date in 2005.

    At this point, the remaining stockholders who think SCO has a case against IBM might well ask why SCO wants additional delay. SCO can't afford much more delay.

  42. From the... by bloggins02 · · Score: 4, Funny

    "You-can't-make-this-stuff-up dept."

    This is SCO we're talking about, they can make anything up!

  43. Re:I Suppose Bankruptcy by freshman_a · · Score: 2, Funny

    would be too much to hope/pray for?

    as much as i'd like to see them go bankrupt, i'd much rather see the snot beat out of them by Big Blue in court first. i think it would be slower and more painful for them that way. not to mention more fun to watch.

  44. Just like to point out... by Simon+Carr · · Score: 4, Insightful

    October 2003, stock hovers at a high of $22.

    Now, stock is at $4 and from the looks of things could easily drop back down to $2.

    Hype over. The put up or shut up phase where people assumed they had a case is over. They must have known there was a point where the stock price couldn't be inflated any more by innuendo and "maybe sorta" proof, so I'm wondering why they'd continue down this path?

    --
    -- The unsig...
  45. McBride blames IBM, Novell for SCO's fiscal woes by joeldg · · Score: 4, Funny

    Here is a link that made me laugh..

    This morning, however, McBride had to face the music with shareholders during the Unix vendor's quarterly earnings call, where he reported sharply reduced earnings and sparse revenue from its licensing business.

    McBride put the blame squarely on his rivals for raising doubts in the minds of potential licensees about the legitimacy of SCO's ownership of System V Unix. SCO alleges that IBM illegally contributed Unix code to the Linux kernel and has levied a $5 billion suit against Big Blue.

  46. Do NOT support SCO!!! by rice_burners_suck · · Score: 5, Insightful
    The highlights are that SCOX only collected $11k (yes, K) for that much-discussed license for EV1 and other Licensees.

    I am very happy to read that SCO has made such a large net loss. This is not because support for Linux as much as it is because I do not support the type of business practice employed by SCO.

    I strongly believe that companies have a duty not only to their owners, but also to their customers, suppliers, and even to their competitors. The last one, the duty to competitors, is a duty to compete based on a better products and services, better marketing, better pricing, a better overall customer experience, etc.

    I think that, while litigation is sometimes necessary, most issues can be settled outside of the court system in a mutually beneficial way, or at least in a way that minimizes the damages to all parties involved. Further, litigation and other legal actions (lobbying for legislation, etc.) should not be employed as a source of profit for a company, but only to solve legitimate problems.

    In the case of SCO, I think they have thrown all good business practices out the window, while embracing litigation as a potential source of profit. Essentially, instead of elevating themselves by making sound decisions and consistently improving themselves, they are trying to become elevated by pushing others down. Kind of like the "everything is relative" argument - if you push someone down, then you could say that you have elevated yourself even though you stayed in the same place. This is what SCO is trying to do, and it is not beneficial to anybody except, if they manage to pull it off, themselves. This is a very egoistic and self centered company with no desire to make anything of value. And companies like this should not be supported.

    For those reasons, I am glad that SCO had these losses, and I hope that investors pull their investments, new investors don't buy SCO stock, and potential customers go elsewhere. This evil company should not be supported by anybody.

    Not to mention that I strongly believe that there is no legal issue of any SCO code being copied into other software. In fact, I believe quite the opposite: Either:

    1. No code was ever stolen from SCO.
    2. Or, SCO plagiarized (for lack of a better term) source code from other sources, and later, upon finding identical code elsewhere, either believe that the theft happened in the other direction, or don't believe it themselves but hope to convince others so that they may profit from it.
  47. Re:Progress report by Bull999999 · · Score: 2, Insightful

    Tell that to the ex-Enron offiers.

    --
    1f u c4n r34d th1s u r34lly n33d t0 g37 l41d
  48. Re:Text is wrong, this quarter does not include EV by TheRealFixer · · Score: 2, Funny

    They were still extremely shifty as to how much exactly that deal is worth. Darl spouts off a claim that it's still 6-figures, but less than 250k. Didn't EV1 already deny that the amount was 6 figures? Maybe Darl's including decimal places.

  49. Re:Progress report by nelsonal · · Score: 2, Informative

    The execs are still responsible to their shareholders. The safe harbor provisions of securities law don't cover fraud. Darl and Co should buy mansions in Florida whicb has solid domicile protection in bankruptcy proceedings (you almost always keep the house regardless of cost). Which is why so many Tyco and Enron execs bought $10 million and up homes there just before the final hammer fell. Also, other debtors can attempt to go after corporate equity holders in cases of criminal circumstances, and depending on the laws in the state in which SCO is incorporated.

    --
    Degaussing scares the bad magnetism out of the monitor and fills it with good karma.
  50. Thanks! by Rei · · Score: 4, Funny

    I'd just like to give a big Thank-You to SCO for scaring the bejesus out of any other company who might try this line of attack again, and for helping keep Linux in the news.

    ** Thank You, SCO!!! **

    Linux users in the future will be able to take pride in your accomplishments in making businesses lose their fear of some company trying to do what you did and costing them money, while at the same time pushing awareness of Linux as a real alternative to proprietary products and companies which pursue legal whims like this.

    --
    "99 dead duelists of Dios on the wall. 99 dead duelists of Dios! Take one's ring, pass it around..."
    1. Re:Thanks! by DrEldarion · · Score: 4, Insightful

      helping keep Linux in the news.

      Maybe, but it hasn't exactly been positive news. People who didn't know much about Linux and heard about this whole SCO debacle are probably even LESS likely to want to switch over now.

      Obviously, anyone who has had the situation explained to them (and actually understands the explanation) will think differently, but the average Joe User will see the uncertain history/future as another reason not to switch over. "Why should I switch if sometime in the future I may have to pay $600 because it turns out that someone owns it?!"

    2. Re:Thanks! by blueZhift · · Score: 3, Insightful

      Well the average Joe User wasn't likely to switch before the SCO debacle anyway. Joe just uses whatever came on the PC. But now it is more likely that in the future Joe will use the Linux that comes on his WalMart PC along with OpenOffice and Firefox or Opera. Why more likely? Only because many basic apps have good viable free alternatives to MS apps. Joe user just wants to do what he wants to do, so if a box with Linux is say $100 cheaper and does what he wants, then he'll probably buy it. The only thing holding him back in the past may have been gaming, but heck, Joe probably does all of his gaming on a console now anyway because they are cheap and easy to use.

      So Joe's heard of Linux now, but that doesn't matter. The important guy is Corporate Mike who's trying to cut costs and increase reliability. That's the guy MS is worried about keeping.

    3. Re:Thanks! by Jugalator · · Score: 2, Interesting

      I know some people who doesn't care much for Linux, and also browse such forums and nowhere have I heard anything negative come from this whole SCO thing. I think also most Windows supporters realize how silly they are. :-P

      --
      Beware: In C++, your friends can see your privates!
  51. Wrong Link by krgallagher · · Score: 3, Funny

    Darn! I was hoping the the URL pointed to the litigious bastards' own web site. That way when the /. effect hit, they could accuse us Linux freaks of another DOS attack.

    --

    Insert Generic Sig Here:

  52. Already delisted? by TWX · · Score: 2, Interesting

    I thought that they were already delisted, and only noticeable through a specific lookup.

    They're not in the newspaper stocks listings...

    --
    Do not look into laser with remaining eye.
    1. Re:Already delisted? by red+floyd · · Score: 4, Informative

      You're looking on the wrong exchange. SCOX is listed on NASDAQ, not NYSE.

      --
      The only reason we have the rights we have is that people just like us died to gain those rights. -- Cheerio Boy
  53. Replay available already by bpland · · Score: 3, Informative
    Ok here is the Bittorrent of the SCO Conference Call today in mp3 format.

    sco.penguinman.com

  54. Re:Only 11k? Am I missing something? by Malor · · Score: 4, Informative
    They're being, as usual, deliberately deceptive. (shock, horror!) With all the other numbers, they specifically mention last year and this year, but in the case of the SCOSource revenue, they mention ONLY last year in the main article body. They go right from 'SCOSource revenue for 2003' to 'total revenue for the first two quarters of 2004'. They never mention SCOSource revenue for 2004 in the main article body. They're hoping, by clever wording, that you won't notice.

    To find the $11K number, you have to dig down into the numbers below. Lining things up on Slashdot is very difficult, so I'll just paste the relevant line:

    SCOsource licensing revenue 11 8,250 31 8,250
    That's telling you they made $11k in the prior three months, and $31K in the prior six months, as compared to $8250 last year. In 2003, it would appear, they made all their money in Q2, 8.25 million.
  55. Even more than that by doublem · · Score: 2, Interesting

    These are fiancial guys Joe Sixpack listens to. Mainstream all the way baby.

    --
    "Live Free or Die." Don't like it? Then keep out of the USA
  56. EV1 figures not in this Q2! by Anonymous Coward · · Score: 2, Informative

    This brings a whole new light to the scale of EV1Servers.net ..

    No, since EV1 isn't included in these numbers, it doesn't bring a new light -- except as mentioned in the tele-conference; the EV1 deal is less than $250,000.

  57. Darl's Cease & Desist Blunder by bstadil · · Score: 4, Informative
    As usual Darl et al didn't do their homework. From Korh over at SCOX Yahoo site

    " it turns out that EVERY SINGLE company listed on NASDAQ is traded on the 'unofficial regulated market' at Berlin-Bremen.

    Note that Darl, during the call, said that these were "unregulated" markets, which is clearly not the case."

    "About Berlin-Bremen Stock Exchange: Like all other German exchanges the Berlin-Bremen Stock Exchange is separated in three market segments: Official Market; Regulated Market and Unofficial Regulated Market. Special significance is attributed to the Unofficial Regulated Market at the Berlin-Bremen Stock Exchange. With more than 8,000 national and international companies admitted the Unofficial Regulated Market unparalleled -- both in terms of size and diversity. .. All companies listed on the NASDAQ, NYSE, and several OTCBB companies are listed on the Unofficial Regulated Market of the Berlin-Bremen Stock Exchange, giving investors the largest choice of American stocks in Europe."

    --
    Help fight continental drift.
  58. What will happen to Unix? by wandazulu · · Score: 2, Interesting

    As much as I have enjoyed watching this slow-motion train wreck, I am starting to wonder what will happen to the actual Unix rights SCO has, presuming that they will need to sell everything at some point to pay off their creditors.

    Though I have to imagine the government couldn't *possibly* agree to this, can you imagine them selling the rights to Microsoft? Because of all the insanity this company has been willing to wallow in, I can't, for one, imagine them selling the rights to some benevolant organization; I'd think they'd rather do something to screw Linux over "just one more time".

  59. Graphed by Dayflowers · · Score: 2, Informative
    --
    I am a speak english. Do you not? - Saroto
  60. Come on folks, Let's help!! by lcsjk · · Score: 4, Funny
    Now I know there are a lot of /. readers out there like me who hit the link every time there is a new SCO story. But it seems SCO is going under and we will be left with only M$ to bash. Of course M$ has a lot of lousy security and other problems, but they just keep on going and doing their thing like they don't care if we complain or not. Day by day there is nothing new; just new versions of viruses, worms and back doors. They are underhanded and quiet and like to do things like third party funding of SCO.

    SCO is not like m$. Every few days they have a new exciting story' some believable and some not, but what will we do when they're gone? I shudder at losing my sole internet entertainment and so far, you readers have been very stingy with your money. SCO has come up with a lot of ideas for emergency funding, but none seem to be working well.

    What can we do? Well, I have a plan. It's called "SOSco" for "Save our SCO". Shortly, I will be starting up a small company to help provide "stay alive" funding for SCO, at least until their court case. Except for my salaries and actual overhead expenses, the remainder will all go to SCO. With nearly 100,000, /. readers and just a few dollars each (we will accept non USA currency also) I think we can keep things going for one or two more years. That's a small price for this kind of entertainment. Oh, I forgot! I will have to put aside enough funds for a good lawyer team just in case someone tries to sue us for using SOS (since it may have other meaning)and most likely from SCO themselves for using a derivitive of their name without their permission. Be watching daily, because this will be an exclusive story on /. as my company will depend on you readers for it's major funding.

    Thanks,from the team as SOSco

    lcsjk

  61. OMG! by Royster · · Score: 5, Funny

    DOn't tell me that *foreign brokers* are evading SEC rules *which don't apply to them* by *trading in their own countries*! What fiends!

    Now, if we can only link them to terrorists, we can torture them.

    --
    I have discovered a truly marvelous sig, unfortunately the sig limit is too small to contain i
    1. Re:OMG! by ostrich2 · · Score: 2, Insightful

      ...and even if we can't, we can still torture them.

  62. Piercing the Corperate Veil by alficles · · Score: 5, Informative
    Actually, IBM may be able to Pierce the Corporate Veil and go after Darl himself. While they may or may not be able to put him in jail, they can sue him for way more than he owns (which is much more than he is worth). In order to go after Darl, IBM would have to prove three things: (quoted from linked article)
    According to the court, the instrumentality rule requires proof of three elements:
    1. complete domination and control of both the entity's policy and business practices;
    2. use of such control to commit fraud or wrong, breach of a legal duty, or a dishonest or unjust act (such as using such control to avoid personal liability previously assumed by an individual); and
    3. that the aforesaid control and breach of duty must proximately cause the injury or loss.
    IMO, the Nazgul should have no trouble with showing these in a countersuit. Darl is not going to be out of hot water any time soon.
    1. Re:Piercing the Corperate Veil by codemachine · · Score: 2, Insightful

      It'd be even better if they could go after those that funded SCO, instead of their puppet management.

      Better targets for IBM are Canopy and Microsoft. Maybe Sun, but that'd open up a whole other can of worms. I doubt they'd even want to touch a MS case for that matter, although they might not mind digging up evidence for the anti-trust folks to use.

  63. corporate america by mabu · · Score: 4, Insightful

    All the while this CEO got paid a huge salary:

    Management blamed the slow sales on a "lack of SCOsource licensing revenue." SCOsource is the Linux users' shakedown program. Apparently, no one is paying up. It took in $11,000 last quarter. That's not a typo. President and CEO Darl McBride paid more lip service to "increasing shareholder value," but you really have to wonder about the viability of his vision when his firm's most engrossing initiative brings in less money than the guys who mow lawns in my neighborhood. By the way, McBride was paid more than $1 million last year -- most of it in cash -- to preside over this impending disaster.

    It really is sickening. And there seems to be no hope in sight for regulatory reform in this area, when public companies can perform goofy shit like this with impunity.

  64. Why R&D? by rumblin'rabbit · · Score: 2, Insightful
    I don't get it. SCO spent over 2 million on R&D last quarter. Why? Their "conventional" business is dead in the water. Consider that (1) they've pissed off huge numbers of IT managers with their IP claims against Linux, (2) they are in a highly volatile situation and may not be around long, and (3) they have developed a delightful habit of harassing and suing their own customers. One would have to be an idiot to initiate business with SCO.

    It's rumoured that BlueStar made the same point to SCO. I think they were right. SCO's conventional business should be in "harvest" mode right now.

    Does anyone know of a reason that SCO should be investing money in R&D?

    1. Re:Why R&D? by Vancouverite · · Score: 2, Interesting

      To make the scam look better....

      Consider: If you are the SEC, and a number of people write you a number of different letters, all along the line of "Company X is pulling a Stock Scam. They don't have any real intention of staying in business. They just want to pump their stock, and sell their business.", one of the things you would look for is continuing investment in the company. And, certainly, R&D investment would count.

      <TinfoilHat>
      What would be interesting would be to see where those $$ are being spent. Could they have contracted their R&D to some outside (Canopy) company as a way of pumping a bit more money out of the rapidly dying husk of a company?

      Hmmmm.......
      </TinfoilHat>

      --
      We are the Music Makers, and We are the Dreamers of Dreams...
  65. Agreed. by zonix · · Score: 2, Interesting

    Maybe, but it hasn't exactly been positive news. People who didn't know much about Linux and heard about this whole SCO debacle are probably even LESS likely to want to switch over now.

    Agreed. When this whole damn thing was at it's hottest, I saw Darl McBride on CNN actually mentioning Linux together with - I'm pretty sure - the words 'cyber terrorism'. All of this makes for a really bad combination for the average Joe and Jane User.

    z
    --
    What would an EWOULDBLOCK block, if an EWOULDBLOCK could block would? -- me
  66. "Goodwill" by Theatetus · · Score: 5, Informative

    Goodwill is a term of art in accounting. There's a brief summary on Wikipedia. Essentially, "goodwill" is the magic dark matter of accounting that is used to explain whither otherwise inexplicable money goes and whence it comes. For instance, say one of your company's buildings appraised for $1 million but somebody else bought it for $2 million. That goes down as $1 million of "goodwill" so that the numbers balance out. Conversely, if someone else's building appraised for $2 million but he sold it to you for $1 million, that's another example of $1 million of goodwill on your books.

    Hint relevant to this situation: it applies to securities as well.

    --
    All's true that is mistrusted
    1. Re:"Goodwill" by Anonymous Coward · · Score: 4, Informative

      Heh, no. What you describe is profit. Goodwill is always immaterial, it's the reputation of the company and its products, value of its trademarks, such things, expressed in money.

      E.g. if you spend $1m on advertising and your reputation goes high (your company has higher value), you estimate how higher the value is and account: $1m off your bank account (assets) to advertising (expenses), the value increase (say $2m) to goodwill (assets) and some revenue account.

      However, what SCO did is quite opposite, they had to lower the goodwill and increase their expenses by the same value. This is done when your real reputation goes so low that it's evident it does not have the same value as in accounting.

      This is good, because managers can perhaps better understand what is going on when they see SCO lowering their goodwill.

      (Sorry for my english, some of the terms may not be right but the main idea is.)

    2. Re:"Goodwill" by Theatetus · · Score: 2
      What you describe is profit.

      That would make more sense, wouldn't it? But this is accounting. Oddly enough, if I buy a new server to put my web hosting clients on, that server is "profit". If I overpay for the same server, the overpayment amount is "goodwill". Which is why I'm glad I'm not an accountant...

      --
      All's true that is mistrusted
    3. Re:"Goodwill" by cweditor · · Score: 5, Informative

      The charge is for "the impairment of goodwill and intangibles." This is a specific accounting situation covering the decline in value of an intangible asset such as a corporate brand, see the Financial Accounting Standards Board statement 142 or the March 2002 CPA Journal.

    4. Re:"Goodwill" by Otter · · Score: 4, Insightful
      E.g. if you spend $1m on advertising and your reputation goes high (your company has higher value), you estimate how higher the value is and account: $1m off your bank account (assets) to advertising (expenses), the value increase (say $2m) to goodwill (assets) and some revenue account.

      I'm no accountant, so take all this with a grain of salt, but -- in the US, advertising costs must be expensed, not capitalized. (International practice is definitely different regarding capitalization of research, for example, and advertising may be similar where you are.)

      You're both kind of right, but his explanation that goodwill accounts for the difference between acquisition cost and fair value is much closer to the definition under US GAAP than your model of companies continuously changing their balance sheets to reflect their popularity. Again, internationally YMMV.

      (So no -- it's not like SCO's accountants said "We suck, everyone hates us, revise the books!")

    5. Re:"Goodwill" by llefler · · Score: 4, Informative

      Actually, it's a good thing you are not an accountant.

      Goodwill is a perceived value that is higher than book value. For example, you decide you want to expand your web hosting business. A friend of yours is also in the web hosting business, but wants to move on to another career and sells his business to you. Now he has done a lot of work and his customers really like doing business with his company. So when he sells his business to you, he wants more than the book value of his assets because he has built a loyal customer base that will become yours along with his business assets. The difference between the book value of his company, and what you actually have to pay him for it, goes into your accounts as goodwill so that you can depreciate it like any other asset.

      It's not that accounting is odd or a black art, it's that you don't understand that every dollar has to be accounted for and properly categorized.

      --
      It is amazing what you can accomplish if you do not care who gets the credit. -- Harry Truman
    6. Re:"Goodwill" by Otter · · Score: 2, Insightful

      Yes, but his larger point is correct. Goodwill is generated by the mismatch between book value and a transaction cost. You can't (as the person he was responding to contended) keep increasing the goodwill value of the acquired business whenever you think it's worth more.

    7. Re:"Goodwill" by msobkow · · Score: 2, Insightful

      I think the intent of your argument is correct, but I don't think it's a very good example.

      The established customer base would normally be part of the purchased corporate valuation, as the value of an established business includes it's reputation, customer base, and projected established revenues. The value of the physical assets is often trivial compared to the established market presence.

      --
      I do not fail; I succeed at finding out what does not work.
    8. Re:"Goodwill" by neurojab · · Score: 3, Insightful

      >It's not that accounting is odd or a black art, it's that you don't understand that every dollar has to be accounted for and properly categorized.

      I submit, however, that modern accounting does defy common sense. "Depreciating goodwill like any other asset"...

      Good Lord. Accountants have invented their own laws of time and space. I found out the other day that you can depreciate an appreciating asset.

      I wouldn't call accounting a black art exactly... it's more a series of tricks and diversions designed to legally conform to (while still evading) a badly designed tax code.

  67. The Motely Fool's Take by scorp1us · · Score: 2, Informative

    http://biz.yahoo.com/fool/040610/1086881820_2.html

    A very entertaining read.

    --
    Slashdot's rate-of-post filter: Preventing you from posting too many great ideas at once.
  68. BAH HAH HAH HAH by GoatEnigma · · Score: 4, Informative
    Share Statistics
    Shares Outstanding: 14.42M
    Float: 7.80M
    Shares Short (as of 10-May-04): 4.62M
    Short % of Float (as of 10-May-04): 59.27%
    Shares Short (prior month): 3.95M

    Bwa hah hah! What a ridiculously mismanaged company.

  69. $2, why stop there? by twitter · · Score: 2, Insightful
    Now, stock is at $4 and from the looks of things could easily drop back down to $2.

    I'd say it was headed for 0.

    --

    Friends don't help friends install M$ junk.

  70. Why Would a Business Buy From SCO? by ac7xc · · Score: 3, Insightful

    If you buy their UNIX or Linux Product later on down the road they will read something in a license agreement and file suit against you like they did with IBM, Autozone and Chrysler. Their legal actions are similar to Ford Motor company suing people that buy their SUV's for painting their cars or repairing a tail light. Business by litigation is always bad for corporations that need customers to buy their product to survive.

  71. Perspective for an old Troll. by twitter · · Score: 2, Informative
    Let's have a look at some Linux company stock prices:

    People are making money with free software, get over it. Investors are all doing as well or better than greedheads who have lost half of their money listenting to the greedheads at Microsoft. Anyone who put money into the SCO extortion plan deserves to lose every penny and will.

    --

    Friends don't help friends install M$ junk.

  72. Things are starting to make sense now by doctor1 · · Score: 2, Interesting

    I read here that SCO was seeking a 5 month trial delay. That makes sense to me. If my buddies and I were pulling down tons of cash, and salaried no less, by coming up with stupid ideas, like extorting money from big corporations, then I would want to keep drawing my salary as long as possible. Especially if our stupid extortion scheme was only pulling down about $11,000 every three months.

    --
    Astronauts in weightlessness of pixilated space, exchange graffiti with a disembodied race. - Rush
  73. Can They Save thier Unix Business? by HighOrbit · · Score: 4, Insightful

    Apparently BayStar wanted SCO to get out of the Unix business and into the lawsuit business. But what if they did the opposite? What if they stopped forking money over to lawyers and concentrated on developing and selling Unix? They still had 10M in revenue from this quarter. They only spent 1.9M to make that revenue plus another 2.8M in R&D. That's a potential operating profit of 5.3M. There are many small businesses that would be glad to make 5.3M every quarter. The IP-licensing side of their business with all their lawsuits cost SCO 4.4M (see the line about Cost of SCOsource licensing revenue) and only paid back 11K. I think you can see where the money is hemorrhaging.

    I was never a SCO Unix user, but I understand it was (at one time) a repectable unix back in the day and I don't see why it can't be again with a quarterly R&D bugdet of 2.8M. If I was a serious shareholder (not a speculator) interested in growing the business, I would want to know why they don't stop wasting money on this longshot lawsuit crapshoot and start concentrating on what they themselves describe as their "core" business.

    1. Re:Can They Save thier Unix Business? by cant_get_a_good_nick · · Score: 2, Insightful

      1) though cool at one time, it's been many years since SCO was a solid competitor in the OS race. Linux has past it a while ago, and is now far ahead. They made an what can seen to be an admission as such when they came out with OpenUNIX, which was UnixWare 7 with a bunch of Linux pieces bolted on. The market responded with apathy, and the current lawsuits happened. The amount of work to make it a worthy competitor to Linux could never be made up for in sales revenue.

      2) The SCO we talk about now is not the SCO that built OpenServer/UnixWare. It's more of a holding company. All of the old SCO talent (and there was a good bunch at one time) is in Tarantella (what the old SCO renamed itself when it spun out the OS).

      They don't have too many other choices for using the codebase as a revenue stream.

  74. Re:Mowing lawns by Anonymous Coward · · Score: 2, Funny

    I'd gladly pay Darl $20 to mow my lawn.

    You'd better not - I'm sure as soon as you did, he'd put up no trespassing signs on your yard, and demand $699 for you to leave your house.

  75. Don't Harass the Innocent! by cheesedog · · Score: 2, Insightful
    By calling this number, I fear you will be harassing an innocent man:

    Can someone please confirm that this is the Darl McBride of SCO (what is the first letter of Darl's middle name, for starters)? For more than one reason, I believe that if it really were him, he wouldn't have his number listed (remember, the guy hires an ontourage of body guards to protect him against 'militant linux extremists' whenever he leaves his little enclave). If slashdot readers ruthlessly prank this number without confirming who it is they are really calling, its likely to backfire when open source supporters are portrayed as unjust lunatics.

    And if they guy isn't the Darl Mcbride, hasn't he suffered enough already by sharing the same name?

  76. Not so fast... by dcavanaugh · · Score: 4, Interesting

    Most of the rights to SYSV belong to Novell, not SCO. From a Linux point of view, nobody has shown any infringing code, but some variants of Unix really ARE based on SYSV and the ownership of code might matter. I doubt that even Novell can actually prove ownership of everything in SYSV or clearly define their rights in a way that would hold up in court. Therefore they collect revenue in some areas where their rights are not disputed, using SCO as a sort of collection agent.

    There is a theory out there stating that Sun's attempt to open source Solaris is just a ruse, so as to pump up whatever is left of SCO's credibility.

    Sun: "We are going to GPL Solaris".
    SCO: "No you can't, we own Unix and the license you bought from us does not allow you to GPL Solaris".
    Sun: "Oh, that's right. You own Unix, and that's why we paid for a license. Silly us."

    If IBM somehow becomes the owner of SCO's IP (whatever that may prove to be), they could possibly remove the SCO "obstacle" to Solaris/GPL and therefore call Sun's bluff. In that case, Sun would just make some other excuse for declining to GPL Solaris (probably blaming Novell). It would be fun to watch, but not quite so much fun as seeing the "For Sale or Lease" sign at SCO headquarters or Darl's resume on monster.com.

  77. The worst, slimiest, crookedest bit by rewt66 · · Score: 4, Informative
    The "loss of goodwill" means that a company they bought didn't do as well as they thought it would, as others have pointed out here. But near the bottom of this story on Groklaw, somebody anonymous points out the real dirt. The company that didn't do so well was Vultus. SCO bought Vultus from Canopy, which is the private outfit that owns almost half of SCO.

    This sure smells like the minority owners (Canopy) are bleeding cash out of a publicly-traded company (SCO) by selling it a loser.

    Canopy has done stuff like this before. When one of their companies goes bankrupt, they (Canopy) wind up with the assets that matter, whether or not the company was publicly traded. They do this by making sure that the company that is going under owes Canopy money, so that Canopy is a creditor at bankruptcy time.

    In other words:
    1. Create a private company (company A).
    2. Take company A public. Company A now has lots of money.
    3. Create another private company (company B).
    4. Sell company B to company A.
    5. Profit!

    But wait, there's more...

    6. Make sure company A owes you money.
    7. Let company A go bankrupt.
    8. Using the assets that you get back from the bankruptcy, go to step 1!

  78. Darl's "sucking effect" by Anonymous Coward · · Score: 2, Funny

    I don't know if anyone has posted this before, but there is a great quote from this article on MSNBC that I had to share:


    "The GPL has this sucking effect of grabbing your IP [intellectual property], sucking it in and destroying your property rights," McBride said.

    Torvalds, the Linux founder, ridicules that notion.

    "Having a hole in your head has this sucking effect," Torvalds said, firing back at McBride. "The GPL doesn't 'grab' any IP at all. The only thing that is desperately trying to grab other people's IP is Darl McBride and company."


    Go Linus!

  79. Re:Bonus by SillySlashdotName · · Score: 2, Informative

    So far, he has had one profitable quarter in a row.

    Last year.

    When SUN/Microsft bought "licenses".

    Bad Darl! No bonus!

    --
    Acts of massive stupidity are almost never covered by warranty. --me.
  80. At least get it right... by BattyMan · · Score: 2, Funny

    That's "Hurd of GNUs", you moron.

    --
    Exceeding the recommended torque is not recommended.
  81. Re:Connections by Dyolf+Knip · · Score: 2, Interesting
    I dunno about this one. Did a globexplorer.com satellite photo search on that address. It's a pretty posh neighborhood, but doesn't have the outrageously ostentatious, "fiddling while Rome burns" feel that I think someone like McBride would demand. He's made a boatload of money from his antics, and I can't believe that SLC real estate is altogether expensive.

    Though to confirm another followup post, Darl's middle initial is indeed C.

    --
    Dyolf Knip
  82. Pretty positive, actually by crucini · · Score: 2, Interesting

    SCO's been saying that Linux is so powerful and advanced that it destroyed the market for Unix. Those who understand the situation realize that when SCO says "Unix" they mean their own pathetic products - most IT professionals would think of Solaris, HPUX and AIX. And Linux is not really ready to displace those at the high end.

    But to the general public/financial community SCO has sent a loud and clear message that Linux has crushed Unix. It almost makes me wonder if IBM arranged the whole thing.

  83. Linus on the Sucking Effect by PizzaFace · · Score: 2, Informative
    My favorite quote from the Washington Post article, which reports how SCO and Microsoft have tried to convince customers that Linux's GPL license is dangerous:
    "The GPL has this sucking effect of grabbing your IP [intellectual property], sucking it in and destroying your property rights," McBride said.
    Torvalds, the Linux founder, ridicules that notion.
    "Having a hole in your head has this sucking effect," Torvalds said, firing back at McBride. "The GPL doesn't 'grab' any IP at all. The only thing that is desperately trying to grab other people's IP is Darl McBride and company."
  84. My favorite view of SCO by shanen · · Score: 3, Informative

    http://uk.finance.yahoo.com/q?s=SCOX&d=c&k=c1&c=IB M&a=v&p=s&t=1y&l=off&z=m&q =l

    Right now it shows they've lost about 50% of their value relative to IBM over the last year. It also shows how volatile the SCO price is relative to IBM's stability. Since the lawsuit started more than a year ago, the one-year view doesn't really capture the entire story, and on the two-year view (one click away) you can see that SCO still has to fall some more to get all the way back to where they were before they started this circus. But only a little more. They're almost there.

    Current price is $4.89, but I think they may get into the three dollar range next week.

    A lot of this discussion involved the value of goodwill, but SCO should be more concerned about the Goodwill store. They'll need to buy "new" shirts after losing the ones they have now.

    --
    Freedom = (Meaningful - Coerced) Choice != (Speech | Beer^2), and sad sock puppets' bad mods avail them naught.
  85. Is this spooky or is it just me.. by genericpenguin · · Score: 2, Interesting

    .., slightly offtopic but here goes.

    SCO vs APPLE Stock

    Have a chuckle and then get back to the real world(work).

    --
    "Why, Johnny Ringo. You look like somebody just walked over your grave." Doc Holliday, Tombstone.