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BayStar Sets Lawyers on SCO
myster0n writes "According to The Register: 'SCO's attempts to rescue its relationship with BayStar, its biggest backer, have come to naught. On Friday morning, Eastern time, SCO announced that the stock buyback deal it agreed with the unhappy investor had closed. Two hours and five minutes later, Baystar issued a statement saying that a) no it hadn't and b) we'll see you in court, matey.'" Thanks to The Reg for the write-up.
Actually they are in California, so it should be "we'll see you in court, dude." You are probably thinking of Royal Bank of Canada (RBC) that originally was apart of the $50m cash infusion that backed out a while ago when Baystar bought them out.
Yes there is - a matter $30m, roughly. If Baystar get their way, they could get back their entire $50m, as opposed to the $22m that SCO are offering, as far as I can tell.
When those dueling press releases were issued friday July 23, 2004 only long time SCO2 watchers Stephen Shankland of Cnet "SCO, BayStar resume squabbling" and Eweeks Steven J. Vaughan-Nichols "BayStar Threatens to Sue SCO" reacted to the PR releases of SCO and Baystar (the later with a good double feature), joint by USA Todays Tech Investor "SCO says BayStar deal closed; BayStar disagrees".
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Today a second wave of Bad PR build up, starting with two refrubished Stephen Shankland
articles in Australia, followed by Tom's Hardware Guide noting that SCO2 is in a "FiaSCO - SCO's war on Open Source about to be fought on six fronts" (notice that this is the same side that debunked Darl's Naked German Shorts before the last conference call was over)
http://www.tomshardware.com/hardnews/20040
Next was Londons The Register to notice that "BayStar sets lawyers on SCO"
When daylight crossed the atlantic, SCO2 tried to build a dam agaist the wave of bad PR and issued two press releases at 8 o'clock US east cost time in a desperate move to cover the bad news at the top of their news heap, to scroll it off the screens like a Troll posting bogus messages. Let't get some popcorn and see if it holds.
My rules of investment which are also followed by Warren Batty (or do I follow his rules? ehh I like my wording), is to never short a stock. The most money you can make from a short stock is the current price times the number of share you buy. Meaning that as the company approaches zero, the less likely you are to make more money. See in a regular stock purchase, your highest price approaches infinity because there is no limit to how high the stock can go; therefore, your better off to buy a positive company.
In the case of SCOX, the most you could make is $4.15 per share as of 10:38AM ET.
While I agree that shorting SCO right now, if it were possible, wouldn't be the greatest idea, the people who shorted SCO at $24 are happy.
Both traditional investment and short selling have limits. Speaking both technically and practically there are limits to high high a stock can go. There is only so much market share available before you have to start dealing with anti-trust legislation and market saturation. Things get increasingly difficult the bigger you get. For this reason, stocks rarely go above certain values.
Conversely, there is a lower limit to stock price for shorting a stock, $0, but that doesn't mean your gain is limited. If I decided to risk big and short SCO for a million dollars, confident that SCO will be out of business real soon now and then they do go bankrupt, I just made a million dollars. It doesn't matter if they were trading at $0.01 or $1,000,000 per share when I bought them, I still made a million dollars.
Sometimes your strategy is good. Sometimes it is bad. There are few absolutes in investment.
Random and weird software I've written.
I think we need to take a good look at what they claim to own in their court filings:
JFS? ported from OS/2.
RCU? Initially refused by Linus until IBM granted all of opensource use of IBM's patent on the technology.
ELF? Released to the open public as a standard by Novell, Old SCO, and Intel.
There are more but they are along the same lines.
This case is baseless.