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SCO Stock In Danger of Delisting, Again
hweimer writes "In 2005, SCO got into delisting trouble because they failed to file their annual 10-K report in a timely manner. SCO seems to be headed the same way again for a different reason: the stock price is too low to meet Nasdaq's requirements. Quoting: '[W]hat can a company do to boost its share price? Besides stopping to burn money and come up with a working business model, I mean.'"
When your business model depends upon litigation, and you have no one else to sue. What do you expect to happen?
K
Do a 2:1 or 3:1 reverse split to bring the price back over the listing requirement. It would keep them in the game but would probably accelerate the collapse of the company.
There are 4 boxes to use in the defense of liberty: soap, ballot, jury, ammo. Use in that order. Starting now.
Big deal. The way SCO is burning through money, it'll be in bankruptcy by the end of the year anyway. Earlier, if Novell gets its way and gets the Microsoft and Sun licence money put into trust.
and you only have a single bucket. How do you stop the ship from sinking?
The answer? You don't. It's useless to try to stop the inevitable.
..so the business model is the lawsuit.
Didn't the law firm that's running the case basically get handed the store as their legal fee? I'm not exactly sure of the details, and I can't do much checking right now since I'm about to run out, but that was my impression.
Back it up with proof, and quit hiding behind the anonymous coward.
Otherwise, you're just another SCO troll.
In order for that strategy to work, they would need to attract, and be able to pay,
a CEO with enough credentials (i.e., education, relevant experience, and good/great
track record turning around failing companies of SCO's size range) and credibility
to be able to assuage investors, both the current wallpaper holders as well as any
potential future investors. This would mean an overhaul of the current business
model (such as it is), and possibly the dismissal not only of Darl, but all of his
minions. That means that the new CEO would have to recruit a lot of talent in a
very short period of time, and those recruits would have to hit the ground running - hard.
I seriously doubt that there is anyone out there meeting the basic requirements who
would be willing to stick his/her head into the furnace.
I'm sure that IBM and Novell each have their own plans to pick over the carcass, such
as hiring an engineer or two, and disposing of the real estate and other fixed assets.
It will be interesting to see if legal action can/will be taken against Darl and his
lackeys, either criminal or civil or both, not to mention possible stockholder suits, etc.
Sheesh, evil *and* a jerk. -- Jade
After 30 days of trading below $1., they'll get a warning notice from NASDAQ. Then they have to trade above $1 for ten straight days out of the next 90, or get a second notice, and a second chance to get their stock above $1 for ten straight days.
What is *more* troublesome for the SCOundrels is that if they're under $1 on May 15, they're likely to be dropped from the Russell Microcap index, which would likely trigger a selloff from funds referencing it.
As much as this stock is being shorted by people waiting for the death plunge, either case may be enough to finally tip it over. And with the case obviously headed for oblivion, the likelihood of a Black Knight stepping in with bags o' money again is pretty slim.
SCOX DELENDA EST!!
SCO's share price woes are the shareholder's problem. If they're happy with the way the CEO is running the company then bully for them. If not, they can always sell and/or fire the CEO.
Deleted
SCO is not in the position to buy back their shares but they do have a very simple option, a reverse split. Although it isn't common and often has a negative effect on the market capitalization of a firm because it is a sign of weakness in the market it will have the needed results. It is quite simple to do, legal, and only requires the board of directors to execute. Shareholders don't even have to agree, although most would if it means the difference between being listed or going the way of an OTC stock.
Share repurchase programs usually don't have a significant effect on price by themselves. The number of shares needed to repurchase, and the cash needed to execute a significant repurchase program often doesn't make it feasible to significantly fix the stock price. Share repurchase programs are usually designed to server one of two puposes: to signify that management thinks the company is undervalued, or to consolidate ownership. The second option is only used when a company has piles of cash and it accounts for more than 10-15% of the market cap. Smaller programs tend to be used to accumulate treasury stock while the price is low, then re-sell that stock as the price gets at or above where management thinks it should be in order to raise capital without issuing more debt.
I fail to see your point here.
So he has a blog, and tries to make some money with it. Then he writes something he think is worth sharing and, not only that, slashdot editors agree it is worth sharing.
Then you add the fact that many of us use Firefox and NoScript and/or Adblock.
What is exactly your problem again ? Do you, per chance, have a blog and no one visits ?
I just visited the link, and saw absolutely no ads of any kind.
morcego
I never claimed the article was unworthy.
And, though offtopic, I know exactly why noone visits my blog - it gets an entry a good two to three times a year.
Back in the post-Y2K .com bubble burst, I have seen many stocks going through reverse 5:1 or even 20:1 splits... and in the vast majority of cases, the stocks simply crashed back down immediately after the split. Doing a reverse 20:1 to get your stock from $0.50 to $10 only to have it trade back down to about $2 by the end of the week is pretty bad.
Almost all anti-delisting reverse splits I have seen back then ended up as suicides... and even today, they still translate into extended near-death experiences often followed by bankruptcy.
I say suicidal because many of these stocks stayed stable at low values for weeks and simply crashed back down to their pre-reverse-split levels immediately after the reverse-split... basically, traders perceived the companies' share as having a roughly constant worth regardless of how few of them there were - this essentially says the company is considered as a lost cause by investors.
Examples of successful reverse splits are few and far between and the dot-com era had very few if any of these.
Successful reverse-splits do exist but these usually only happen when companies avoid getting into deep trouble... or when companies simply want to reduce the number of shares.