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Investment Firm Bids to Buy SCOs UNIX Operations
WebCowboy writes "It appears that there are still enough people out there deluded enough to see value in SCOs UNIX operations. York Capital Management has put in a $36 million bid for SCOs UNIX operations. The offer includes coverage of up to $10 million for payment of legal fees and York Capital would assume ownership of the disputed UNIX IP as well as what is left of the lawsuits.
Interestingly, SCO has offered this up for competitive bid (who would want to though?). Upon completion of the transaction, should bankruptcy court approve, SCOX would become solely a mobile applications provider (which is the only part of SCOs offerings that have undergone any meaningful development for quite some time)."
I can't know whether he's listening, but for York Capital Management to make a profit out of the operation, they need something viable they can sell. The parent post is in essence pointing at the support contracts for already installed POS devices as that viable thing.
Linux user since early January 1992.
The thing is SCOX has a market cap of around $5m at present. So a hostile takeover would cost considerably less than $36m. So how is this good value fo r the equity company and its investors? Because they're just buying the assets and not the debts, bad name, lawsuits, etc. SCO gets to keep all that junk. ;-)
The old /. joke expressed as 4 lines that end with 'Profit' is not really applicable.
It's actually a three-line joke from Southpark.
The kids follow the underpants gnomes, and when ask why the underpant-gnomes are stealing people's underpants, they show a big board where it says:
1) Collect Underpants. 2) ??? 3) Profit
Everytime the kids ask what step two is, they get the answer that step three is profit.
It's imho the best episode of southpark, you should definitely watch it!
Because they're just buying the assets and not the debts, bad name, lawsuits, etc. SCO gets to keep all that junk. ;-)
Which as such would seem like good news for Novell, because then there would be $36m more to grab from the SCO corpse.
However, TFA clearly states that YCM would be taking over the litigation claims as well. The whole idea is that said SCO corpse actually remains viable by focusing on something other than UNIX and litigation. Novell will then need to collect the money it is due from YCM (which is a good thing for them as well, since YCM actually has that money).
The thing that I don't like about this scheme, is that YCM will (wisely) withdraw all the lawsuits before focusing on making a profit out of the deal. This means that at the end of the whole 4 year mess, there will be no clear verdict stating how badly SCO has behaved.
Linux user since early January 1992.
Indeed, excellent episode. Now, if only there was some place online - a website of sorts - where you could view the relevant part of the episode ;)
In a market where Facebook (without an obvious revenue stream) is valued in the billions...
You realise Facebook is pulling in $150 million per year revenue, right?Wrong. The liability for the lawsuit would not be transferred by the deal, so YCM would take everything BUT the lawsuit's liability, therefore making them "magically liable for nothing". Thats why YCM wants to do this deal, they get no risk out of it other than managing a company. Also look a little deeper, YCM has some ties to microsoft.
It should be noted that the agreement specifically EXCLUDES the transfer of the Novell and IBM litigation to York. The actual motion can be read on Groklaw (as usual) with more info than the LinuxWorld article.
Let me try to explain better. YCM is accepting the company, but SCO is retaining the lawsuit liability of this specific case with novell for themselves. Meaning they have all this money but the money has nothing to do with the liability. Novell may have money owed to them by SCO in far excess of 36M or even 46M. We're talking 10+ years of business that got 0% royalties instead of 100% royalties as owed (note: not 96 or 95%, they were supposed to get 100% and return back a percentage after).
If you did some damn research instead of being a typical slashie with bad information, you would have gone to groklaw as mentioned and seen more details than the original website. Part of being a smart slashie is doing your own research in addition to articles posted because we all know they aren't always correct, summary and article for that matter. Don't attack my ego because you didn't do research and are thusly a moron because you got a +5 with incorrect information.
Regardless, if you had read at grok, you would have seen: "Among the excluded assets are "Seller's litigation with Novell and IBM, and its claims and choses in action other than the Linux Litigation." The total purchase price, SCO says, consisting of cash and non-cash components is "in the estimated aggregate amount of up to $36,000,000". SCO has to reimburse up to $50,000 of York's fees and expenses in connection with the deal. And if York is designated as "stalking horse" under the Bid Procedure Order, and if others outbid York, SCO has to pay them a $780,000 breakup fee and reimbursement of all expenses incurred by York up to $300,000."
So yeah, I'm not god, but I do my due dilligence and don't post out my ass (you forgot to wipe).
Look, I just stated you were wrong. With the "limited information" you had, you were wrong. Could I have been more polite? Sure, absolutely. You decided to open a Bevets style flamewar with the "god comment". I would not have given you an insult had you not earned one by firing the first shot and making it sound like I cared about my ego or someone else's. I said you were completely wrong. Is that bad to have an opinion that your information was incorrect, or did you already state that for me?
I don't have problems admitting my mistakes, in fact I enjoy asking for information when I am wrong, whereas you defend yourself. I think you might want to learn the difference between welcome criticism and provocation of others. If I am wrong, sure, call me on it. Also, I do care about +5, because I wouldn't want someone to have misinformation as a top post because other people will be misinformed. That wasn't aimed at you, that was aimed at correction of data. I've had it happen to me and I asked mods to mod down my posts when I did.
I didn't address your critique because I didn't want a flamewar. It's not that I am 100% right, I may or not be, and thats immaterial.
I also didn't claim it was MS FUD. I claimed that YCM has ties to Microsoft. The correct company is JGD Management Corp. d/b/a (doing business as) York Capital Management. Know who owns JGD and also has a board of directors straight from microsoft? JGD (Acacia) (SEC link).
So yeah, sorry if you got offended, but try not to start an insult fling and you might not get called a douchebag next time. I welcome snarky comments, not elitism.