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Baystar Confirms Microsoft Behind SCO Investment
Posted by
michael
on Thu Mar 11, 2004 10:55 AM
from the peeling-the-onion dept.
from the peeling-the-onion dept.
Bruce Perens writes "Business Week has confirmed that Microsoft arranged the Baystar investment in SCO. A managing partner of Baystar says the call wasn't from Gates or Ballmer. But it wouldn't have to be, would it? Obviously, there's more investigation to do." Reader skreuzer writes "Yahoo Finance is reporting that SCO announced that the company's board of directors has authorized management, in its discretion, to purchase up to 1.5 million shares of SCO's common stock over the next 24 months. SCO has approximately 14.4 million shares of common stock issued and outstanding. Any repurchased shares will be held as treasury stock and will be available for general corporate purposes." Newsforge (which is also part of OSDN) is also following the story.
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Baystar Confirms Microsoft Behind SCO Investment
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Tell the truth, dammit (Score:5, Informative)
Golly gee, I wonder what they're trying to hide? Anyone?
Re:Tell the truth, dammit (Score:5, Funny)
/Obvious tag needed
Re:Tell the truth, dammit (Score:5, Funny)
(http://www.modus-ponens.com/blog/)
OH PLEASE! No you've gone too far... they would never go that...
D'OH!
-m
Re:Tell the truth, dammit (Score:4, Funny)
(Last Journal: Wednesday January 07 2004, @09:54AM)
No.... DOD!
Re:Tell the truth, dammit (Score:5, Funny)
Re:Tell the truth, dammit (Score:5, Funny)
(http://www.andrewarbon.co.uk/)
Re:Tell the truth, dammit (Score:5, Informative)
(http://www.amen-online.org/)
Well, if a Microsoft representative called Baystar from his private phone during a holiday, then it was technically not Microsoft who orchestated this.
I wonder if Microsoft could be sued at all for unfair competition if Bill Gates chose to openly fund SCO shares from his private money?
Re:Tell the truth, dammit (Score:5, Informative)
(http://nojailforpot.com/)
Nonsense. If a Microsoft representative calls up SCO on Christmas eve from pup someplace in Christchurch while wearing a pink tutu, and that person has their cell phone signal bounced off of the solar reflectors on the Mars rover, relayed through several satellites and sketchy third world telephone exchanges, bounced through sever P2P nodes and then piped into the PBX of the Mormon church, if that person is representing the interest of Microsoft at the request of superiors, then yes, technically Microsoft "orchestrated this."
MOD PARENT UP...here's why. (Score:5, Insightful)
Re:Tell the truth, dammit (Score:4, Interesting)
(http://www.mp11.com/ | Last Journal: Monday July 11 2005, @02:55PM)
SCO starts wins over IBM, Linux becomes illegal.
Microsoft, who is now apparently backing SCO, aquires SCO in a take-over. Microsoft now owns the rights to UNIX and a significant portion of Linux.
How can it be a monopoly, if there is no competition?
Re:Tell the truth, dammit (Score:5, Interesting)
Wrong. If an employee, in the preformance of assigned duties or at the direction of their employer - or even just with the knowledge of the employer, or if the employer SHOULD HAVE KNOWN - performs an illegal act, the company is responsible. In addition, the company does not lose their liability if the employee is told to wait until a non-working day and use a phone other than their office phone.
If the employee, on their own, with no knowledge or approval, or expectation of approval of their employer did whatever evil and nefarious act, then the employer is not responsible or liable.
In this case, if a person identified themselves as a Microsoft representative to BayStar and in some way gave BayStar the idea that Microsoft was interested in BayStar doing a deal with TSG, and BayStar, acting on the belief that it was in fact a Microsoft representative and a Microsoft request, entered in to the deal with TSG, then Microsoft IS technically "orchestrating this."
I wonder if Microsoft could be sued at all for unfair competition if Bill Gates chose to openly fund SCO shares from his private money?
Interesting thought. The answer is "No, to a point."
If B.G. buys stock on the open market, he is buying from some other individual that owned the stock. D.McB. might like that - especially if he is buying the stock from D.McB. - but TSG (the company) would derive no benefit from the transactions.
Up to a certain point he doesn't even have to declare his stock ownership (I believe it is around 5% of outstanding shares) - and it would take a much larger number of shares to actually be able to manipulate the actions of the company.
The BayStar transactions, on the other hand, directly funded the further operations of TSG - including the attacks on Linux (and Linus) which seen to be in line with (and possible intended to further?) Microsofts' interests.
Remember that there are things that a free marke company CAN do that a MONOPOLIST CAN'T do. This would seem, in my opinion, to be one of those things...
The litmus test of this (Score:5, Insightful)
But why would microsoft recommending SCO be a useful thing to baystar? Microsoft supposedly has no financial dealing with baystar so there's not "favor" to be granted here. And Microsoft obviously had a vested interest in giving the advice and I'm sure baystar was smart enough to see through that--so the advice would have no tangible use.
KEY point: The most benign explanation is that they were merely bringing it to baystars attention and presumbaly did so to many other companies. The key test is then: did they or did they not call hundreds of other speculative investment houses in hopes of convincing one with this long shot advice?
If they did not do so with many other companies then why did they think they had any standing to cold call baystar and give tainted advice? If they just called baystar alone then its very fishy. they must have promised other tangibles. Such as investing in companies baystar recommended back or promising cash influxes and supprt for the lawsuit.
It's ALWAYS a quid pro quo (Score:5, Insightful)
Or, Steve and Bill said they'd put alot of money in your hedge funds if you work on this little problem of ours.
Nothing written of course.
it doesn't take too much imagination to think of plenty of reasons.
Re:The litmus test of this (Score:4, Insightful)
Re:Tell the truth, dammit (Score:4, Insightful)
"Contrary to the speculation of Eric Raymond, Microsoft did not orchestrate or participate in the BayStar transaction."
This if I understand correctly is commercial speech. I wonder how the judges in the many instances of barratry that SCO has indulged in will like the fact that SCO is trying this in the court of public opinion, influencing juries, and all of that with bare lies. Not clear either how the so-called business channels that get all indignant and prissy over Martha Stewart can barely get themselves worked up to even report this. C'mon folks, this is a good and evil story like no movie ever seen.
Re:Tell the truth, dammit (Score:4, Insightful)
(http://www.vems.co.nz/)
C'mon folks, this is a good and evil story like no movie ever seen.
No it isn't. To most business-minded folks, MS isn't evil - it's the pinnacle of corporate success. This is just how the game gets played. If it's illegal then sure it might get press, but just being dirty scoundrals isn't enough to get anyone interested.
Re:Tell the truth, dammit (Score:5, Interesting)
"Microsoft has no direct or indirect financial relationship with BayStar."
Those two statements are very close to lies but may just be deceptive statements that omit very important facts. I say this because it actually appears that Paul Allen orchestrated the SCO investment. I say this because:
- Paul Allen is a former member of the board of directors of MS and the second largest shareholder. Paul Allen now serves as a senior strategy advisor to top Microsoft executives [microsoft.com].
- Paul Allen is one of the largest investors in BayStar Capital [wired.com].
So Paul Allen is in a position to advise and influence both MS and Baystar. He also has significant financial holdings in both companies. There is no tinfoil hat necessary to draw this connection.Holy smoking gun batman! (Score:4, Informative)
Jumping to Conclusions (Score:5, Informative)
If you actually read the PDF, you will see that you (and Wired, for that matter) are jumping to conclusions. The chart showing Vulcan Ventures (and Microsoft, for that matter) is a chart of data from PlacementTracker showing the overall number of PIPE deals. The vast majority of which have nothing to do with Baystar. This paper is Baystar's way of convincing people that PIPE transactions are a good thing.
None of which is to say that Vulcan and/or Microsoft don't invest through Baystar -- just that this PDF says nothing about it.
-Steve
Re:Tell the truth, dammit (Score:4, Interesting)
Scosource Gregory Blepp (hired from SuSe) was many times very close to break the injunctions on the German market. If SCO tried to sell licenses or spread FUD at CeBIT, Hanover the rapid response would be to report the offence to the police and let them put the managers in jail.
BayStar and M$ (Score:5, Insightful)
(http://nojailforpot.com/)
If I "suggest" to someone that they invest in something that I have no finantial interest in (SCO), that "suggestion" does not create a finantial interest. At this time.
I speculate that M$ "suggested" to BayStar that sometime in the future, perhaps, maybe, the software giant might possibly make some kind of investment in BayStar, of course totally unrelated to any investments BayStar might have made in SCO, hint-hint-wink-wink...
What's funny is that a few months ago when all us paranoid tin-foil hat folks where saying M$ had their fingers all over this, people said "go back in your basement, way too much illuminati, blaw, blaw, blaw..."
This part is not unusual. (Score:4, Interesting)
(http://slashdot.org/~GMontag/journal/ | Last Journal: Friday November 23, @02:49PM)
Nope, it would not have to be a "tip-top" person, just has to be a Principal or someone with delegated authority from a company officer to be valid. This is not anything uncommon at all.
Yahoo Finance is reporting that SCO announced that the company's board of directors has authorized management, in its discretion, to purchase up to 1.5 million shares of SCO's common stock over the next 24 months. SCO has approximately 14.4 million shares of common stock issued and outstanding. Any repurchased shares will be held as treasury stock and will be available for general corporate purposes.
This is nothing new, odd, illegal, unethical or strange either. It is a common business practice of publicly traded firms.
Now, the underlying story is where the problem sits, not with the scenery.
Re:This part is not unusual. (Score:5, Informative)
This is nothing new, odd, illegal, unethical or strange either. It is a common business practice of publicly traded firms
Not when they're a couple of quarters away from insolvency. Stock buyback usually occurs when a company with low stock price have too much money on hand and no viable avanue of investement available.
SCO qualified 2 out of 3 catagory, but they most definately do not have too much cash on hand.Re:This part is not unusual. (Score:5, Interesting)
(Last Journal: Monday December 06 2004, @10:11AM)
SCO has $50 million from the BayStar deal, with a redemption condition if the stock goes below ~$8.50 for 25 consecutive trading days.
In light of that, initiating a buyback-scheme when the stock started dipping close to this mark is completely expected. Losing the BayStar investment is a much bigger loss than what it'd cost SCO to keep the stock price inflated.
Re:This part is not unusual. (Score:5, Interesting)
This confilicts with the fact that ALL recent insider trades are sells.(after exercising options)
Re:This part is not unusual. (Score:4, Insightful)
(Last Journal: Thursday November 28 2002, @09:21AM)
This is a perfect method of actually paying SCO directors to destroy SCO* for the benefit of M$.
*not that SCO really had a chance w/ x86 unix -- GNU/Linux is going to dominate ALL Unix in short order.
Re:This part is not unusual. (Score:5, Interesting)
That might even count as inisidertrading, depending on circumstances we can't know about, so chances are it's illegal, too.
I guess they could defend themselves by saying it's been common knowledge for a long time that SCO is about to go out of bussiness. Of course, then they'd have been lying about their bussiness prospects... Oops!
Re:This part is not unusual. (Score:5, Informative)
(Last Journal: Sunday October 03 2004, @04:43PM)
Where's the incentive to profit? (Score:5, Interesting)
(http://slashdot.org/ | Last Journal: Wednesday May 05 2004, @10:21PM)
Business Week is in no way a Linux Zealot and even they confirm that Microsoft enjoys competing on a level far removed from technical innovation.
What was to happen at the end of these shenanigans? Once the lawsuit is over, where does SCO expect to get it's money? It's not like Microsoft will continue to invest in them once this crap is over.
And does this come out of the MS advertising budget? Any advertising against our competitors is good PR? There is no way MS could re-coup anything from this other than FUD points. Where's the incentive to profit?
Re:Where's the incentive to profit? (Score:5, Interesting)
(http://en.wikipedia.org/wiki/Molar_mass | Last Journal: Friday September 19 2003, @11:21AM)
Dude, SCO doesn't have a long term continuity plan! McBride and his cronies are all set to cash out about this time next year. Once McBride flys the roost he'll probably turn around and sue SCO himself for something like he typically does. The stockholders will be the ones left holding the bag in the end and it's why I still can't understand why SCO isn't a penny-stock.
Re:Where's the incentive to profit? (Score:5, Interesting)
(http://www.rigidsoftware.com/ | Last Journal: Saturday September 24 2005, @11:58PM)
SCO is not a penny stock because SCO is a quality marketing (FUD) machine. SCO is not a software company. Once you accept that, their situation makes sense.
As for the stock holders, the majority of them are institutions at this point. Slight majority though. The stock is so illiquid who could afford to be in it but big players.
Re:Where's the incentive to profit? (Score:5, Interesting)
Are you serious? Destroy Linux, and the only current threat to the Microsoft monopoly is gone. Every time a company buys Microsoft instead of installing Linux because of fear of lawsuits, that's more profit for Microsoft. Microsoft had every incentive to fund the SCO lawsuits.
IANAL, but I'd like to see a lawyer comment on whether Microsoft could be convicted of conspiracy to violate antitrust laws.
Business week couldn't confirm it... (Score:5, Funny)
(http://www.everyone-wins.net/)
Ironically, a spokesperson for Lucifer, LLC, could be reached, and did indeed comment. "Oh, yes, we're snatching up all the souls we can. There's only two companies in this space right now, and being half of them, we're trying to beat out Heavenly Productions, LP. If they hadn't sunk so much capital into, and gotten so much great PR from that new movie, we might have been able to grab several more souls during the deal. We're betting, though, that soon enough, there will be promises that need to be kept, and then executives of 'certain companies' will be ready to sign their souls over."
When pressed, the spokesperson would divulge nothing further about the companies, except that one of them was in a desert\, and the other in a dreary woodland area. "All I can say is that it doesn't seem to bother these execs, since they seem to have chosen areas much like our [Patent Pending] HELL world."
Heavenly LP, privately held, had no comments. Lucifer LLC was up slightly on the day.
now... (Score:5, Funny)
Countersuit potential? (Score:5, Insightful)
(http://jjjiii.livejournal.com/)
Re:Countersuit potential? (Score:5, Insightful)
(http://slashdot.org/)
The money given to SCO is probably a significant chunk of their total equity now - I don't know offhand how much ownership it purchased, but you might make the argument that SCO is a front for Baystar. Next you need to look at the contributions that Baystar got from MS and how big they are relative to the equity of that company. If you can show that SCO is acting as an indirect-front for MS, then you can probably sue MS for resulting damanges.
If give a friend $100k to "take care of somebody for me", and they give a friend $80k to "take care of this problem", and then my problem disappears from the face of the earth, the police can come after me. If I set up 12 layers of shell companies and went through them, I'm still on the hook. RICO laws and all that - the gangsters were trying to avoid getting caught with this kind of stuff since the start of the last century. The laws are there.
I would think that the best bet for prosecution would be from the state antitrust lawsuits against MS. While most have settled regarding past offences, I'm sure that this settlement doesn't cover future offences.
Not bad (Score:5, Funny)
While I understand that this isn't illegal as such, isn't it an SEC violation?
The SCOundrels' Follies (Score:4, Insightful)
(Have you watched their stock making a run at zero over the course of the week?)
The Flatlander
Does this surprise us? (Score:5, Insightful)
Oh well, move along - nothing to see here..
But at least we didnt have to wait until 3:56 PM for our SCO fix..
3:56 PM - funny you should mention that... (Score:5, Interesting)
(http://mute-net.sf.net/ | Last Journal: Thursday April 28 2005, @03:50AM)
THAT my friends is desparation! To explain their obvious fooling around they came up with some sort of stock buyback scheme today hoping that no one will notice their tinkering.
it seems that it's not even about code (Score:4, Insightful)
CYA time, Mr. Goldfarb (Score:5, Interesting)
(http://www.grub.net/blog/index.html | Last Journal: Wednesday June 27, @08:48AM)
Mr. Goldfarb is trying to look like an honest man while distancing himself and Baystar from MS and SCO. He readily admits that "senior executives" from MS phoned him but won't name names. He's scared. Leaked documents and an unmanagable conspiracy of silence are forcing him to admit to snippets of truth which paint him and the firm in the best possible light.
I don't get it (Score:5, Insightful)
Re:I don't get it (Score:5, Insightful)
(Last Journal: Friday March 26 2004, @02:46PM)
It doesn't take science to figure out that a company with $40bn in idle cash and nothing better to do with it would have no problems with tossing some of that dough into throwing its competition under a cloud of doubt.
Re:I don't get it (Score:5, Insightful)
(http://www.sednet.co.uk/ | Last Journal: Sunday September 21 2003, @02:46AM)
Microsoft would gain a lot of SCO was proved right. But they must have had their legal team look at the situation and report that SCO was just wasting its time.
The best Microsoft can hope for is to spread FUD.
The worst Microsoft could see is the GPL reinforced in court, and a hell of a lot of bad PR for their company.
It's a bad deal from Microsofts point of view.
Microsoft didn't get where they are now though bad deals.
Re:I don't get it (Score:5, Insightful)
(http://blas.phemo.us/)
Microsoft needed a stalling tactic. Two years away from the next-gen OS, security problems riddling their current offerings, and Linux is picking up steam. They absolutely needed something like this. It may have been a "bad deal," but I'd say MSFT was never looking to profit from this investment.
If SCOX had actually won a case, it would have been a bonus, but that wasn't the point of the investment. MSFT wouldn't want anything out of this but to put off adoption until they could fill the gap left by their current offerings.
Re:I don't get it (Score:5, Insightful)
Interestingly enough Halloween VII was making the rounds in Sept/Nov. 2002. It was in August 2002 that SCO brought in Morgan Keegan [threenorth.com] to try to find cash for them--and it was likely Morgan Keegan who both brought Boies on board and negotiated the original "license" deals with SUN and MS.
SCO stock price (Score:5, Insightful)
(http://www.amen-online.org/)