This is actually rather clever. SCO is not claiming that the licensees are using their code in violation of the license, they are asking the licensees to certify that they are not. This puts the licensees in a difficult position: they have absolutely no idea whether or not they are violating the license. They will not want to respond that they are not, because that could come back to haunt them. So, they either have to not respond at all, thus facing the retraction of their license, or (my personal favorite) say they are not violating "to the best of our knowledge." This last might drag them into a legal dispute with SCO.
SCO is like the insane man on the street: he's almost certainly harmless, but nobody wants to get embroiled with him anyway. Thus the dilemma for licensees. For SCO, they end up with many more legal targets.
Studies have shown that the average speed in excess of the posted limit has dropped from more than 10mph to about 1mph on roads that raised their limits from 55mph to 65mph. Arguments about its impact on highway deaths go both ways, but it's hard to imagine that, since the actual speed driven remains virtually unchanged, more accidents can be attributed to the change.
Personally I think that, aside from the whole erosion of respect for the law thing that is usually argued, the lower overhead from stopping the enforcement of useless laws is a good in itself.
I don't think the timing of the payment makes any difference as to whether this should be considered equity... even Common shareholders do not get paid for a sale until the sale is made. The question is, then: if Boies et al were a de facto 20% owner of the company and is involved in day-to-day management decisions, is he accountable for them and to whom?
(1) I would think that their criminal accountability as a member of management for a fraud is no less than their accountability as a outside counsel.
(2) Their accountability to the shareholders of SCO is probably less in their capacity as manager than in their capacity as outside counsel (because it is harder to sue management for fraud than to sue outside counsel for malpractice) but the lawsuit for malpractice would probably have to be brought by the company while the lawsuit for management fraud could be brought by the shareholders.
(3) Their accountability to those being sued, however, is probably greater if they are management than if they were a outside counsel. This would be an interesting tactic for IBM to take if they lose. Actually, IBM should be asking to disqualify Boies right now because of the conflict of interest. If the US Government could disqualify Gotti's attorney (Cutler), then it would seem that this would be a slam dunk, and extremely damaging to SCO's ability to litigate.
Being entitled to a piece of the value of a business is equity. Ask Enron, they 'learned' this the hard way.
I call this 'essentially' equity because there are circumstances where the attorneys are not entitled to a piece of the value of the business, although it is hard to envision these: (1) the lawyers lose the case, (2) the company is not sold and (3) the company continues to be worth something. I think it is number three that will be difficult to achieve without either one or two.
"EC 5-7: The possibility of an adverse effect upon the exercise of free judgement by the lawyer on behalf of the client during litigation generally makes it undesirable for the lawyer to acquire a proprietary interest in the cause of the client of otherwise to become financially interested in the outcome of the litigation... a reasonable contingent fee is permissible in civil cases because it may be the only means by which a non-lawyer can obtain the services of a lawyer of his or her choice..."
So, in your opinion, is this the case? Can SCO not afford an attorney? I suppose, if you were a lawyer, you would argue that they can't afford the attorney of their choice because that particular attorney is demanding a contingency, but this defense is so broad it would make this clause worthless, so it is probably not what the Bar Association meant.
The conflict of interest arises because the attorneys are supposed to represent SCO's best interests. Now, what if SCO's best interests were to drop the litigation and continue as an independent entity? Wouldn't that present an ethical conundrum for Boies et al? To wit: best interests or get paid? I am not saying that the lawyers wouldn't do what is right, only that the conflict exists.
It's always interesting to me that arrangements like this, that are essentially equity, are not considered conflicts of interest--how would a court respond to an attorney owning 20% of one of its clients?
Second this... the attempted 'censorship' was ruled prior restraint and disallowed by the Supreme Court. This was the only interesting part of the legal process. Ellsberg was being tried for theft of government secrets, which his copying of the papers almost certainly was. Once the Watergate scandal broke, testimony indicated that Nixon's infamous Plumbers broke into Ellsberg's psychiatrist's office looking for dirt on him. When the judge in Ellsberg's case found out about this, he properly threw the case out.
So, the lagal issue of using the Common Good as a defense against theft of intellectual property was not settled here.
Google indicating that it preferred to pursue an initial public offering
Well, what would you say if you were negotiating price? Generally an IPO raises more money than a sale (because the public is the greatest fool.) But it is not uncommon for a company to file an S-1, get a read from their ibankers for price and then sell the company to someone else. It would almost never make sense to sell before proceeding partway down the IPO path--how else could you get a feel for value?
Couple that with the fact of the articles in the first place: these aren't the result of 'investigative journalism', there are too many for that (plus business stories almost never are.) These were placed by a PR professional. Why? There can be no other reason than to drum up a better offer.
My rule of thumb is: when a company denies something, it will almost certainly take place. If it weren't going to, they would simply not comment.
Leave Martha out of this you sexist! Especially with Thanksgiving coming up... who will help me get my table set correctly?
Re:How does this stay off the financial newswires?
on
SCO Madness Reigns Supreme
·
· Score: 3, Informative
Some of the smart money is getting out. Integral Capital Partners just filed an amended S-13G showing that they no longer own any SCOX. They were one of the largest holders prior to the lawsuits.
ICP is one of the smartest private investors in California. My advice on news... watch what they do, not what they say. On news sources: best source is EDGAR.
You can get in on the class-action by buying their stock at the current price.
However, your damages would be the amount lost, the company will probably be insolvent if you have the evidence to prove your case, and the directors are almost certainly not personally liable.
Why couldn't Lexmark just use a strong crypto authentication protocol--one resistant to man-in-the-middle attacks? Sure it would cost more to put a real chip with math functionality in each cartridge, but they could make it up by just raising the price. Change the key with every generation of printers and they've probably bought themselves enough time to keep out competitors.
Doerr was one of the most respected VCs. Notice how now the only public face they push is Vinod Khosla? When it comes to making money, it's always what have you done for me lately. Making money back in '99 doesn't count anymore.
As you, implicitly, note, it's not how whether you believe they will have growth so much as whether you believe they will have less growth than everyone else believes. Even a no-growth, income earning company is worth something... much like a bond: your principal doesn't grow, but it pays interest, so the bond is worth something.
I think you're right though that the market-movers don't know that much, or that they're generally too optimistic, so actual growth will probably be lower than the growth priced into their bids. That's why I won't be buying any at auction. Or, at least, not betting the farm.
Because they have investors. Investors are interested in getting their money back, plus some. If the shares aren't registered, they can't sell them for a decent price in a reasonable period of time (reasonable here meaning within the ten-year life of most venture funds.)
Venture backers of Google include Kleiner Perkins and Sequoia. These VCs desperately need a win in their portfolios right now. They've held the investment for over four years, and even if an IPO was announced tomorrow, they wouldn't be able to distribute their shares for close to a year (given the lead time of filing with the SEC, getting the IPO done and then the time large investors are usually required to hold the shares post-IPO.)
For instance, from Google's website:
"John Doerr, Kleiner Perkins Caufield & Byers
John Doerr serves on the privately held company boards of Google, Good Technology, Elance and MyCFO. He also serves on the board of directors of Intuit, Amazon.com, Homestore.com, Martha Stewart Living Omnimedia, Handspring, Freemarkets and Sun Microsystems."
This guy desperately needs a win if he is going to live up to his self-created hype from the late 90s. Think of how depressing it would be to be on the boards of Homestore, Martha Stewart, Handspring and Sun right now.
Historically the 12%-15% IPO discount to market has been thought to compensate for the additional due diligence needed to invest in a new issuer. Assuming that the big money boys price that into their bids, then us small money boys could buy on their due diligence coattails and get a 12%-15% step-up for free.
As long as you believe that the market-movers actually know what Google's worth.
No, liabilities created by legal judgements are unsecured (the loss of the lawsuit may have been what prompted the company to decide on Ch.11 in the first place.) These become part of the pool of unsecured liabiities and the amount allocated to that pool is shared pro-rata by all unsecured creditors.
Unless, of course, the creditor is the IRS. Never forget that the IRS always gets paid.
There's a good chance that X10 has secured creditors and that the Yorba Linda popunder brothers end up with next to nothing. (Not having seen X10's financial statements, I can't say for sure, but a business like this may have factored its receivables or have leased equipment making much of its asset base secured.)
No doubt. Of course, since this is analogous to the famous Travelling Salesperson problem, it is NP complete. Finding a solution in even a medium-sized city, what with the number of vertices, would take an awfully long time. Grid cities are easy because there are simplifying algorithms (i.e. don't move away from the goal) but in more complicated cities (say, London) this is not always true. There probably are simplifying algorithms for any given city, but I'm not sure there are for cities as a group, especially when walking (when you can't weight speed or other variables very well.)
Oh, c'mon. Manhattan is almost entirely a grid, so the problem boils down to if you are going in the right direction, whether you can minimize traffic-light waiting time by deciding when to turn and when to go straight. Crossing parks really only makes a difference if you're going from the Upper West Side to the Upper East Side or vice-versa. Of course, if you're below Canal or above 180th, you're on your own.
Timing wise, if you're a New Yorker you can walk one block per minute, count crosstown blocks as three blocks (except 3rd-Lex-Park-Mad-5th, 1.5 blocks each.) If you're from out of town, figure.75 blocks per minute.
And, if you take the subway it takes 45 minutes. From anywhere to anywhere. Fact.
From 42nd and Madison to 14th and 6th, walk south and/or west, trying to walk south as many blocks as possible to each block west. It should take you 35 minutes.
It's well known you can build a great audience by stressing entertainment or shock value over useful info. Fox News, USA Today, the Weekly World News... the list goes on. In fact the uselessness of most TV newsprograms and daily newspapers is the result of this.
But Forbes has a profitable niche: no-nonsense business articles, conservative slant and none of the cheerleading fluff and BS found at rags like BusinessWeek and Business 2.0. In the pantheon of business news sources, only three have any real quality and carry any weight with executive-level decision-makers: Forbes, the Wall Street Journal and the Economist. This reputation is money; certain advertisers pay whatever it takes to get in front of those people.
But, articles like this undermine this hard-built credibility. First with people like us who can see the fundamental flaws and bias immediately, then with our peers and bosses who we educate. Forbes editors are not stupid and its publishers are not bad businessmen. They understand that the people posting on the forum are not all bearded shut-ins with no influence--many are extremely influential in one of the largest spending categories of a Fortune 500's business. Loss of credibility with the IT folk leads directly to loss of credibility with the executives concerned about IT, who are, today, all successful executives. I predict Forbes will react to the criticism in the way it was intended: they will closely monitor Lyon's output and rein him in from further yellow journalism. If they don't, they will lose share to the better-run but less well-edited BusinessWeek and Fortune. IMHO, of course.
Slashdot Mirror
This is actually rather clever. SCO is not claiming that the licensees are using their code in violation of the license, they are asking the licensees to certify that they are not. This puts the licensees in a difficult position: they have absolutely no idea whether or not they are violating the license. They will not want to respond that they are not, because that could come back to haunt them. So, they either have to not respond at all, thus facing the retraction of their license, or (my personal favorite) say they are not violating "to the best of our knowledge." This last might drag them into a legal dispute with SCO.
SCO is like the insane man on the street: he's almost certainly harmless, but nobody wants to get embroiled with him anyway. Thus the dilemma for licensees. For SCO, they end up with many more legal targets.
In other words, the legal case is all they got so they might as well invest their shekels there.
Having just watched Angels Across America on HBO, I can assure you there is prior art.
Studies have shown that the average speed in excess of the posted limit has dropped from more than 10mph to about 1mph on roads that raised their limits from 55mph to 65mph. Arguments about its impact on highway deaths go both ways, but it's hard to imagine that, since the actual speed driven remains virtually unchanged, more accidents can be attributed to the change.
Personally I think that, aside from the whole erosion of respect for the law thing that is usually argued, the lower overhead from stopping the enforcement of useless laws is a good in itself.
Damn man. If you are NAL, then you should be one.
I don't think the timing of the payment makes any difference as to whether this should be considered equity... even Common shareholders do not get paid for a sale until the sale is made. The question is, then: if Boies et al were a de facto 20% owner of the company and is involved in day-to-day management decisions, is he accountable for them and to whom?
(1) I would think that their criminal accountability as a member of management for a fraud is no less than their accountability as a outside counsel.
(2) Their accountability to the shareholders of SCO is probably less in their capacity as manager than in their capacity as outside counsel (because it is harder to sue management for fraud than to sue outside counsel for malpractice) but the lawsuit for malpractice would probably have to be brought by the company while the lawsuit for management fraud could be brought by the shareholders.
(3) Their accountability to those being sued, however, is probably greater if they are management than if they were a outside counsel. This would be an interesting tactic for IBM to take if they lose. Actually, IBM should be asking to disqualify Boies right now because of the conflict of interest. If the US Government could disqualify Gotti's attorney (Cutler), then it would seem that this would be a slam dunk, and extremely damaging to SCO's ability to litigate.
Being entitled to a piece of the value of a business is equity. Ask Enron, they 'learned' this the hard way.
I call this 'essentially' equity because there are circumstances where the attorneys are not entitled to a piece of the value of the business, although it is hard to envision these: (1) the lawyers lose the case, (2) the company is not sold and (3) the company continues to be worth something. I think it is number three that will be difficult to achieve without either one or two.
Let me expand by quoting the NY Bar Associations ethics code (Code of Professional Responsibility)--note to Bar: I claim fair use!
"EC 5-7: The possibility of an adverse effect upon the exercise of free judgement by the lawyer on behalf of the client during litigation generally makes it undesirable for the lawyer to acquire a proprietary interest in the cause of the client of otherwise to become financially interested in the outcome of the litigation... a reasonable contingent fee is permissible in civil cases because it may be the only means by which a non-lawyer can obtain the services of a lawyer of his or her choice..."
So, in your opinion, is this the case? Can SCO not afford an attorney? I suppose, if you were a lawyer, you would argue that they can't afford the attorney of their choice because that particular attorney is demanding a contingency, but this defense is so broad it would make this clause worthless, so it is probably not what the Bar Association meant.
The conflict of interest arises because the attorneys are supposed to represent SCO's best interests. Now, what if SCO's best interests were to drop the litigation and continue as an independent entity? Wouldn't that present an ethical conundrum for Boies et al? To wit: best interests or get paid? I am not saying that the lawyers wouldn't do what is right, only that the conflict exists.
It's always interesting to me that arrangements like this, that are essentially equity, are not considered conflicts of interest--how would a court respond to an attorney owning 20% of one of its clients?
Second this... the attempted 'censorship' was ruled prior restraint and disallowed by the Supreme Court. This was the only interesting part of the legal process. Ellsberg was being tried for theft of government secrets, which his copying of the papers almost certainly was. Once the Watergate scandal broke, testimony indicated that Nixon's infamous Plumbers broke into Ellsberg's psychiatrist's office looking for dirt on him. When the judge in Ellsberg's case found out about this, he properly threw the case out.
So, the lagal issue of using the Common Good as a defense against theft of intellectual property was not settled here.
Google indicating that it preferred to pursue an initial public offering
Well, what would you say if you were negotiating price? Generally an IPO raises more money than a sale (because the public is the greatest fool.) But it is not uncommon for a company to file an S-1, get a read from their ibankers for price and then sell the company to someone else. It would almost never make sense to sell before proceeding partway down the IPO path--how else could you get a feel for value?
Couple that with the fact of the articles in the first place: these aren't the result of 'investigative journalism', there are too many for that (plus business stories almost never are.) These were placed by a PR professional. Why? There can be no other reason than to drum up a better offer.
My rule of thumb is: when a company denies something, it will almost certainly take place. If it weren't going to, they would simply not comment.
Leave Martha out of this you sexist! Especially with Thanksgiving coming up... who will help me get my table set correctly?
Some of the smart money is getting out. Integral Capital Partners just filed an amended S-13G showing that they no longer own any SCOX. They were one of the largest holders prior to the lawsuits.
ICP is one of the smartest private investors in California. My advice on news... watch what they do, not what they say. On news sources: best source is EDGAR.
You can get in on the class-action by buying their stock at the current price.
However, your damages would be the amount lost, the company will probably be insolvent if you have the evidence to prove your case, and the directors are almost certainly not personally liable.
Why couldn't Lexmark just use a strong crypto authentication protocol--one resistant to man-in-the-middle attacks? Sure it would cost more to put a real chip with math functionality in each cartridge, but they could make it up by just raising the price. Change the key with every generation of printers and they've probably bought themselves enough time to keep out competitors.
Doerr was one of the most respected VCs. Notice how now the only public face they push is Vinod Khosla? When it comes to making money, it's always what have you done for me lately. Making money back in '99 doesn't count anymore.
As you, implicitly, note, it's not how whether you believe they will have growth so much as whether you believe they will have less growth than everyone else believes. Even a no-growth, income earning company is worth something... much like a bond: your principal doesn't grow, but it pays interest, so the bond is worth something.
I think you're right though that the market-movers don't know that much, or that they're generally too optimistic, so actual growth will probably be lower than the growth priced into their bids. That's why I won't be buying any at auction. Or, at least, not betting the farm.
why do they want to float?
Because they have investors. Investors are interested in getting their money back, plus some. If the shares aren't registered, they can't sell them for a decent price in a reasonable period of time (reasonable here meaning within the ten-year life of most venture funds.)
Venture backers of Google include Kleiner Perkins and Sequoia. These VCs desperately need a win in their portfolios right now. They've held the investment for over four years, and even if an IPO was announced tomorrow, they wouldn't be able to distribute their shares for close to a year (given the lead time of filing with the SEC, getting the IPO done and then the time large investors are usually required to hold the shares post-IPO.)
For instance, from Google's website:
"John Doerr, Kleiner Perkins Caufield & Byers
John Doerr serves on the privately held company boards of Google, Good Technology, Elance and MyCFO. He also serves on the board of directors of Intuit, Amazon.com, Homestore.com, Martha Stewart Living Omnimedia, Handspring, Freemarkets and Sun Microsystems."
This guy desperately needs a win if he is going to live up to his self-created hype from the late 90s. Think of how depressing it would be to be on the boards of Homestore, Martha Stewart, Handspring and Sun right now.
Historically the 12%-15% IPO discount to market has been thought to compensate for the additional due diligence needed to invest in a new issuer. Assuming that the big money boys price that into their bids, then us small money boys could buy on their due diligence coattails and get a 12%-15% step-up for free.
As long as you believe that the market-movers actually know what Google's worth.
Oops, looking at the algorithm, I think you're right, although I'm still trying to find my error of intuition.
:)
Of course, if you want to find the longest path, that would be NP complete...
No, liabilities created by legal judgements are unsecured (the loss of the lawsuit may have been what prompted the company to decide on Ch.11 in the first place.) These become part of the pool of unsecured liabiities and the amount allocated to that pool is shared pro-rata by all unsecured creditors.
Unless, of course, the creditor is the IRS. Never forget that the IRS always gets paid.
There's a good chance that X10 has secured creditors and that the Yorba Linda popunder brothers end up with next to nothing. (Not having seen X10's financial statements, I can't say for sure, but a business like this may have factored its receivables or have leased equipment making much of its asset base secured.)
No doubt. Of course, since this is analogous to the famous Travelling Salesperson problem, it is NP complete. Finding a solution in even a medium-sized city, what with the number of vertices, would take an awfully long time. Grid cities are easy because there are simplifying algorithms (i.e. don't move away from the goal) but in more complicated cities (say, London) this is not always true. There probably are simplifying algorithms for any given city, but I'm not sure there are for cities as a group, especially when walking (when you can't weight speed or other variables very well.)
Oh, c'mon. Manhattan is almost entirely a grid, so the problem boils down to if you are going in the right direction, whether you can minimize traffic-light waiting time by deciding when to turn and when to go straight. Crossing parks really only makes a difference if you're going from the Upper West Side to the Upper East Side or vice-versa. Of course, if you're below Canal or above 180th, you're on your own.
.75 blocks per minute.
Timing wise, if you're a New Yorker you can walk one block per minute, count crosstown blocks as three blocks (except 3rd-Lex-Park-Mad-5th, 1.5 blocks each.) If you're from out of town, figure
And, if you take the subway it takes 45 minutes. From anywhere to anywhere. Fact.
From 42nd and Madison to 14th and 6th, walk south and/or west, trying to walk south as many blocks as possible to each block west. It should take you 35 minutes.
I assume this is $789/year +/- about $25,000.
More froth than broth, seems to me.
It's well known you can build a great audience by stressing entertainment or shock value over useful info. Fox News, USA Today, the Weekly World News... the list goes on. In fact the uselessness of most TV newsprograms and daily newspapers is the result of this.
But Forbes has a profitable niche: no-nonsense business articles, conservative slant and none of the cheerleading fluff and BS found at rags like BusinessWeek and Business 2.0. In the pantheon of business news sources, only three have any real quality and carry any weight with executive-level decision-makers: Forbes, the Wall Street Journal and the Economist. This reputation is money; certain advertisers pay whatever it takes to get in front of those people.
But, articles like this undermine this hard-built credibility. First with people like us who can see the fundamental flaws and bias immediately, then with our peers and bosses who we educate. Forbes editors are not stupid and its publishers are not bad businessmen. They understand that the people posting on the forum are not all bearded shut-ins with no influence--many are extremely influential in one of the largest spending categories of a Fortune 500's business. Loss of credibility with the IT folk leads directly to loss of credibility with the executives concerned about IT, who are, today, all successful executives. I predict Forbes will react to the criticism in the way it was intended: they will closely monitor Lyon's output and rein him in from further yellow journalism. If they don't, they will lose share to the better-run but less well-edited BusinessWeek and Fortune. IMHO, of course.
Old release value day -- 5 movies for $5 for five days
Bag of chips and salsa, 2L of soda $6
2 Good joints -- $10
Cool box with propellor antenna on top to impress friends -- priceless.