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Investors Bailing On SCO Stock, SCOX Plummets

Posted by kdawson on from the is-it-wetter-underwater-than-when-it-rains dept.

HailDorothy writes "SCO's stock price is plummeting in the aftermath of Judge Kimball's ruling that Novell owns the UNIX copyrights, as we discussed earlier. '[W]e will continue to explore our options with respect to how we move forward from here,' SCO said in a public statement issued in a futile attempt to calm investors. SCO's stock price has fallen 70 percent during trading today, reaching a 52-week low. It looks like the end is near for SCO, which still owes Novell 95 percent of the SVRX UNIX royalties it collected from Microsoft and Sun through the SCOsource program. As Judge Kimbell noted in his ruling, it's unlikely that Novell will ever be able to collect on those royalties."

11 of 368 comments (clear)

  1. Darl? by Anonymous Coward · · Score: 3, Interesting

    When are we going to get to see Darl McBride's head on the end of a stick? Or is that asshat not going to be accountable?

    1. Re:Darl? by Cpt_Kirks · · Score: 3, Interesting

      I have been thinking about that.

      He made a lot of statements that could be taken as fraud. I wonder maybe IBM could send a package over the the SEC or the Justice Department...

  2. microsoft trial balloon by mytrip · · Score: 3, Interesting

    I think this whole thing was

    A) Pump and Dump SCO stock
    B) A Microsoft Trial Balloon


    The pump and dump worked pretty well. A bunch of SCO execs sold stock and made money at the expense of the future of the company Microsoft funded part of this lawsuit to harass linux users and see what would happen if they started suing linux users and distros as well.

    You'll notice they won't even tell you which patents of theirs linux infringes now. SCO got bad PR instead of them and IBM got good PR for defending linux.

    --
    Contrary to popular belief, Unix is user friendly. It just happens to be particular about who it makes friends with.
  3. Someone bought those shares today. by khasim · · Score: 5, Interesting

    If I'm reading Google's finance page correctly, almost 6 million shares changed hands today.

    http://finance.google.com/finance?q=scox

    Stock cannot sell if someone isn't buying. Who's buying?

    Now I know about "short" and "long". But that's more easily described as a bet where you bet the stock will go one way and someone else bets the stock will go the opposite way. I understand about people having to buy stock to cover a mistake in a short/long. But that's an awful lot of shares being purchased.

    I don't believe that there were than many people betting that it would go up again. Not with the approximately $9 million dollars it would take to have that stock last Friday.

    Who's buying the stock and why are they buying it?

    I can understand everyone wanting to sell it. I don't understand anyone buying almost 6 millions shares of it today.

    Unless it's another scan by SCO to buy stock options from their executives. Trying to empty the company's coffers before Novell gets its cut or IBM beats them.

    1. Re:Someone bought those shares today. by Chris+Burke · · Score: 4, Interesting

      Now I know about "short" and "long". But that's more easily described as a bet where you bet the stock will go one way and someone else bets the stock will go the opposite way. I understand about people having to buy stock to cover a mistake in a short/long. But that's an awful lot of shares being purchased.

      I don't know about the volume of stock being shorted, but I remember several people on /. saying that they had tried to short, only to find that there were no shares available. I wouldn't be surprised to find out that a lot of the volume today was shareholders cutting their losses and shorters covering their shorts and making a killing. Certainly I can't think of any other reason why somebody would be buying the stock today. Of course outside the short-sellers there aren't all that many people anxious to buy SCOX, that's why the price plummeted. The ones who did buy outright instead of covering a short are probably hoping for a dead-cat bounce that will let them make some money in the short term.

      It's too bad I just wasn't in the financial position for a medium-term investment a few years back. After the initial speculation (it -was- theoretically possible that SCO's code had gotten into Linux, much like it was theoretically possible that SCO owned the copyright for UNIX), there was a lengthy period where it was clear to us geeks that SCOX had no case (when they were finally forced to produce some evidence, and came up with nothing better than a few lines from standard header files) but wouldn't have been to the majority of investors. This was also around the time their stock was riding high. This would have been a perfect time to short. Though, as I mentioned, I'm obviously not the only one who had this idea and it may have already been to late to find any shares to short.

      --

      The enemies of Democracy are
    2. Re:Someone bought those shares today. by ToLu+the+Happy+Furby · · Score: 4, Interesting

      Well there were about 2.5 million shares short, so even if they all covered that wouldn't even account for half of today's volume. Plus there's no good reason for a short to cover now--yes, there is value in taking your gains up front rather than waiting for it to drop those last 40 cents, but anyone short this stock has to recognize that SCOX is very likely only a few months from bankruptcy which would mean the stock goes to zero and they don't have to buy back their shares at all.

      The more likely explanation for most of today's volume is day traders trying to make a quick buck on a suddenly liquid and highly volatile stock. Almost 6 million shares may have been traded, but my guess is that that represents a significantly lower number of shares traded back and forth multiple times.

    3. Re:Someone bought those shares today. by Chris+Burke · · Score: 3, Interesting

      Well there were about 2.5 million shares short, so even if they all covered that wouldn't even account for half of today's volume. Plus there's no good reason for a short to cover now--yes, there is value in taking your gains up front rather than waiting for it to drop those last 40 cents, but anyone short this stock has to recognize that SCOX is very likely only a few months from bankruptcy which would mean the stock goes to zero and they don't have to buy back their shares at all.

      If I understand correctly, you cannot hold shorted shares forever, you can be forced to cover. Specifically this happens when the entity from which you borrowed your shares wants to sell them; you have to give them their shares back, and that means you have to cover your short. Since anyone holding actual SCOX shares would probably want to sell them now rather than before the stock drops another 40 cents, it could very well be that all the shorts were by necessity covered too.

      One thing I don't know is if you can, hypothetically, cover your short by buying the very same stock you shorted from the shareholder who wants to sell and is forcing you to cover.

      Either way it's quite possible that a large portion of the volume today was shareholders selling their shares, with the buyers being shorters forced to cover for those shareholders. The image you should be getting is of a lot of money spinning in circles in a porcelain vessel making a "ker-faaaaaaaash-glug-glug-glug" noise.

      --

      The enemies of Democracy are
  4. Buy at 50 cents? by Spazmania · · Score: 3, Interesting

    What I want to know is: who is still stupid enough to buy the stock at 50 cents? Haven't they figured out yet that the next step for SCO is bankruptcy liquidation in which the stockholders get -zilch-?

    --
    Moderating "-1, Disagree" is simple censorship. Have the guts to post your opinion.
  5. Re:SCO still in the running. by gvc · · Score: 3, Interesting

    None of SCO's copyight claims involve their own code. They involve "Original AT&T code." The only SCO code demonstrated to be in Linux is the stuff labeled "Copyright Caldera" immediately followed by a GPL-2 license.

  6. Re:Woohoo by Anonymous Coward · · Score: 5, Interesting

    The amazing thing is that having been found liable for slandering Novell's title, they're still doing it.

    http://www.sco.com/company/profile.html

    "SCO owns the core UNIX operating system"

    Uh, no. How long do they get to keep saying things like this before they're up for contempt of court too?

  7. Sad in a way by Natales · · Score: 5, Interesting

    Don't get me wrong, these guys deserve everything that they get for their cheesy actions in the last several years against Linux. However, now, looking at their demise, I can't stop thinking how did they get there, when they were once "the rebels" against "the establishment" back in the day.

    I started my career as a technical support engineer for SCO Xenix in the late 80s, back in the time where Larry Michaels was there. They had the vision and an excellent code base. I had customers running up to 16 Wyse terminals on a 286 system under Xenix running COBOL applications, and even more could be achieved with SCO UNIX on the 386...

    I know this is just a nostalgic thought and that the SCO I'm referring to has nothing to do with its current incarnation. I hope this can be used as a lesson for Canonical and other very successful ventures that can really become the next best thing: don't become arrogant and forget your values and where you came from. Companies change, but at the end of the day, it's all about the people and how you contribute to make your and our lives better.