SCO Granted Hearing on Potential Delisting

Groklaw Reader writes "SCO will be allowed an oral hearing on its potential delisting. The hearing is scheduled for March 17, 2005, so they again show us what they are best at: staving off impending doom. There is no way to predict the outcome of the hearings, but most of the informed speculation is negative, so there are no silver linings in this case. Unless you think they can find some crazy reason to sue the Nasdaq for billions over it..."

Comments

Huh.

[numbski]

I think that we've seen so much of SCO that we're all collectively out of things to say on the matter.

Delist them and let them go away. Finally.

Re:Huh.

[gstoddart]

I think that we've seen so much of SCO that we're all collectively out of things to say on the matter.

Delist them and let them go away. Finally.

Will de-listing do anything to stop their crap? Or would you get a company who is no longer publically listed in court with IBM? If they still have money to try their legal route, de-listing doesn't sound like it affects that.

Re:Huh.

[MightyMartian]

Even worse, let's just say SCO completely disintegrates. Let's even say, for good measure, that the next year or two is gobbled up with shareholder lawsuits and torture sessions for McBride.

At the end of it, someone is going to buy up what's left, and possibly even with an eye on the case against IBM. I'd rather that SCO survive long enough to be handed its testicles now, rather than have this ugly demon pop up again in 2007 or 2008.

Re:Huh.

[UID30]

delisting is not quite as it sounds. they would really "move" from Nasdaq SmallCap to OTCBB or Pink Sheets. they would still, however, be a publicly traded company.

Re:Huh.

[m50d]

You kidding? Just find the +5 insightful comments from the last SCO thread and copy them. Mods can't tell the difference anyway.

Re:Huh.

[Tackhead]

> > Will de-listing do anything to stop their crap?
>
> Sure will spell the end of their credibility.

...for values of "credible" that were already approaching epsilon.

I have to admit I like the "E" that's been added to denote their delisting. SCOXE. Rhymes with "Goatse".

Re:Huh.

[LaCosaNostradamus]

We may as well just say it:

SCO's legal battle with IBM/Linux/OSS/whatever is a stock-pumping scam.

De-listing them will curtail their stock marketability, hence the motivation to continue the legal battle.

Don't get me wrong. Their executives' stock could still be sold ... but under less advantageous conditions, especially that of liquidity. Also, a de-listing could lead to a devaluation, which would simply further harm the stockholdings of these execs. These two effects may be enough for them to throw in the towel with this bullshit legal battle.

Re:Huh.

[clymere]

IBM's interests are not simply in buying up SCO and making this go away. If they desired that, they would have simply settled out of court with SCO long ago.

This entire thing has made Linux questionable. IBM has invested a great deal of time and money into Linux as a business strategy. What they are trying to do with SCO is prove, in court, that Linux is 100% legitimate, and that there are absolutely no legal issues regarding any od the code contained within.

SCO is not important to them in the least, as a company. But this court case is. If they don't settle it once and for all in court, it sets a dangerous precedent for others to follow in SCO's footsteps.

Re:Huh.

[schon]

At the end of it, someone is going to buy up what's left, and possibly even with an eye on the case against IBM.

Yeah, right.

Name one company who would have the corporate deathwish to want the losing end of a $1B patent/Lanham act lawsuit from IBM?

Remember that IBM's counterclaims are compulsory - that is, someone can't just buy the "good" part of the lawsuit and ignore the "bad" part - the two are intertwined. MS would have to pay someone a whole hell of a lot of money to touch that.

"Gates: Hey, I'll pay you $50M to hold this potato for a couple of minutes. Oh, don't worry - I'm wearing these welding goggles for fashion, just ignore the glowing."

Re:Huh.

[NatteringNabob]

Anybody that inherits SCO vs IBM is also going to inherit the IBM counterclaims, and the Lanham Act charges at least look rock solid by now. Judge Kimball has practically announced that SCO had no evidence whatsoever of massive copyright violations when they were making extravagent claims. I believe the word he used was 'astonishing' to describe SCO's lack of evidence. In addition since SCO has already agreed that the GPL is a valid license, and the only authority they have to distribute IBM's JFS, RCU, and NUMA code is the GPL, it is going to be hard for the new owner to manufacture any anti-GPL FUD.There is an excellent chance that they will lose on CC6 which would leave them liable for millions of dollars in damages. SCO may go belly up, but their legal arguments are in the court record now. Even if there was some value in the bones of Unix, SCO's legal exposure makes the company positively radioactive from the point of view of any potential buyer. Note, IANAL, but you knew that.

Re:Huh.

[Zeinfeld]

Sure will spell the end of their credibility.

Come on, will nobody ask why SCO can't produce a simple 10K?

The only reason SCO is at risk is because they failed to file their accounts on time. That is a very very rare reason for being delisted. Most companies get trashed because they have failed to keep their marketcap above the required threshold ($50 mil??) which SCO seems to be OK on or they fail because their stock price falls bellow $1 for too long which SCO is also OK on.

So why does a company fail to make its 10K? Its the most basic thing a CEO is required to do. In every case I can recall where this has happened it is because the auditors have refused to approve the accounts.

This is not a minor issue, it is a bombshell. To fail to get your accounts in means that either the auditor thinks there is something fishy going on or the company does not have the cash on hand to pay their bill. Either way looks bad for SCO.

On St. Patrick's Day, No Less

[ackthpt]

The hearing is scheduled for March 17, 2005, so they again show us what they are best at: staving off impending doom.

St. Patrick's Day?!?! Gee, imagine Lucky the Leprechaun as an SCO spokesman: "Always after me impending doom!" At least it gives us another occasion to toast with our pint o' Guinness, Harp, Murphy's or some beer with green food coloring in it (hopefully not Sudan-1.)

Unless you think they can find some crazy reason to sue the Nasdaq for billions over it..."

Maybe NASDAQ is running some of it's systems on Linux and that's SCO's perceieved Ace-Up-The-Sleeve.

NASDAQ Hearing Committee: "Your company is going down the toilet, you're a parriah and you can't even get your paperwork filed on time"
Darl: "Avast thar, ye scurvy dogs! We be finding yer exchange has a Linux installation on a server, tucked away inna corner. Renew our listing or we'll sue yer fer IP theft and make ye walk the plank! Arrr!"
NASDAQ Hearing Committee: "You're also a pretty piss-poor pirate. At least get a parrot."

Re:On St. Patrick's Day, No Less

[Alsee]

At least get a parrot.

But they already have Laura Didio and Robert Enderle.

-

wait a second...

[ed.han]

"unless you think they can find some crazy reason to sue the nasdaq for billions over it"

rather than suing IBM for millions for some crazy reason, eh? :>

ed

Victim's Impact Statement

[bigtallmofo]

Will all of us be permitted to prepare and recite a victim's impact statement during the hearing?

Suing NASQAQ?

[Aeron65432]

Don't even suggest the idea, they might do it.

They Could Still be a Thorn

[iammrjvo]

Even if, in a few years, there's nothing left of SCO, all it would take would be a small legal department to continue to make trouble for years to come.

Hedge Funds

[artlu]

As a hedge fund manager myself, one of our strategies is to target distressed companies in order to turn profits. However, SCO's model of late has been dismal for the product category that they are targetting. For example, a company like Rambus ("RMBS"), which basically makes their money from I.P. regarding memory has staying power as their patents span many products and industries.

On a side note, my hedge fund does not have the resources of taking over a company, but following Eddie Lambert's role with KMart/Sears it would not surprise me if an independent company would make a requisition bid for SCO.

Aj

Hang in there

[rdavidson3]

We need you. You can't leave us...

If you do leave, what else would the /. community laugh at

Re:Ahhhh....

[Zocalo]

Unfortunalty that's not The SCO Group. You probably meant SCOX, but since they are now delinquent in their SEC filings they've had a nice red "E" appended to their ticker symbol. The correct Yahoo! Finance page is here.

Re:symbol..

[Anonymous Coward]

yes, that's an acknowlegement that the underlying company is not in compliance with exchange rules and is under investigateion.

Delisting

[bazmail]

Delisting is not the end of a company. It takes the shine off their corporate presence, but little more. The huge crippling lawsuit on the other hand could well be the end for SCO, here's hoping. This is a non-story about a non-company.

Bring on the litigation.............

Re:Delisting

[mcc]

SCO is entirely a PR construct at this point. They have no notable products or future sources of revenue. Their stock is their sole product. They exist to try to convince enough people that they are too a real company that they can attract investors.

When your business is PR, a PR defeat is a defeat to your core business. This means that delisting is a much more serious problem for SCO than it would be for a normal company; if you take the shine of SCO's corporate presence away, what is left?

Re:Delisting

[michaelas]

It does more than take the shine off their corporate presence. The major exchanges have stringent filing and reporting requirments. If SCO gets delisted it could have an enormous impact on their stock price since many investors, especially institutional investors will not touch an OTC stock. The negative impact on the stock can have a profound ripple effect on the company. Shareholders or the board can revolt and shake up management. It could even open SCO to a hostile takeover. ...Michael...

Obligatory SCO Comment

[Cytlid]

Everytime there's an SCO story, I feel obligated to comment.

Hmm.. oral hearing? Will I be able to find pictures of Daryl with the kneepads on, on the web soon?

Isn't it amazing....

[JustNiz]

According to this story:
http://www.theregister.co.uk/2005/02/25/sc o_titani c/

Sco's total revenues are down 59% and their SCOSource revenues are down a staggering 99%. Sco are badly losing in court and now they are probably going to be delisted.

Isn't it amazing that Darl McBride gets a salary well in excess of $1m, a bonus of 750,000, plus thousands of shares and options.

How does Darl get away with it and how can a board of directors that pay him actually be THAT stupid?

Re:Isn't it amazing....

[Kwil]

Stupid?

Have you looked at the deals the board is getting?

You've got it backward

[mcc]

We want SCO to survive. From SCO's perspective meanwhile it is best to quietly go bankrupt shortly. SCO's case is now entering the area where their lawsuits will soon be over-- but the countersuits against them will just be starting. The longer and more messily these suits can be dragged out, if possible against The Canopy Group in addition to just SCO, the better it will be, since this will generate press about how the company that tried to destroy Linux and its executives are tied up in court and being soundly punished for it.

SCO needs to be kept alive long enough for them to serve as an example to others...

Re:SCO is evil

[rewt66]

Can't resist a challenge ;-)

Canopy (SCO's parent) was planning on finding the Czarist gold to fund their continued growth, but couldn't find it. So they hired Darl to head SCO and make them a bunch of money instead.

Unfortunately, back in the 60's, Darl actually found the Czarist gold. But the government wanted him to pay taxes on it, so he assassinated JFK. The UFOs decided that the Czarist gold was causing us a lot of trouble, and so in our own best interest, they took it. Unfortunately for SCO, at the same time the UFOs also stole Darl's brain, on the grounds that since he had assassinated JFK, he was too dangerous to leave unchecked. But this missing brain caused large problems for SCO down the road, when they tried to take on IBM...

(In case it isn't clear to one and all, there is no connection whatsoever between this post and reality.)

This may not be a good thing

[spisska]

While I don't doubt that Darl & co will be in jail within a couple years, SCO's delisting may not be the good news that it seems.

Keep in mind that our primary desire should be for SCOs idiotic lawsuits to be resolved with a decision that sticks. If the company simply disappears and the suits are unresolved, it doen't really help Linux because the IP questions in the case would still be open, at least in a narrow, legal sense.

With IBM's heavy investment into Linux, I have to believe that they want resolution, not simply that the case go away. The question is, can IBM get a decision if SCO goes belly-up before the case ends?

Obviously, as a company SCO is finished. As a lawsuit with a logo, they have very, very little chance. However, what we need for Linux is a judgement that finally and fatally destroys them.

Then the real fun starts -- criminal cases. IANAL, but if I were, I would be salivating at the prospect of going after McBride, personally, for everything from wire fraud (he does use the telephone, right?) to petty theft of company pens before all SCOs property is auctioned off.

As I see it, he will very soon have a great deal more personal attention than he ever wished from the SEC, FBI, IRS, and a lot more folks with blue suits and Federal Government IDs.

Hmmmmm.

[jd]

Microsoft could sue. Delisting is doing an IsNot(SCO) operation, and IsNot() is patented to Microsoft.

Technically, I suppose, removing SCO is applying the same entry on top of itself, as an XOR or reverse field. If SCO didn't grant permission to use the modified version of its trademark, it might have a trademark infringement case.