BayStar Cashes Out of SCO Stock 524
Kurt Wall writes "According to Yahoo! Finance, BayStar, the company that funded SCO to the tune of $50,000,000, and then later changed the terms of the deal, has requested that SCO redeem the 20,000 shares of preferred stock issued in return for the funding. The reason? BayStar states that 'SCO has allegedly breached Sections 2(b)(v), 2(b)(viii) and 3(g) of the Exchange Agreement.' Naturally, SCO thinks it has done nothing of the sort."
PREFERRED Stock (Score:5, Informative)
These shares value is set at $1000 each... so this is quite a big chunk out of SCO's warchest...
Happy day!
Watch it fall! (Score:5, Informative)
Not $50M, only $20M (Score:2, Informative)
Whoops! (Score:3, Informative)
"Owner of the UNIX Operating System" (Score:5, Informative)
They're still talking out of both sides of their mouth though. They still claim in their press release that they are, "the Owner of the UNIX Operating System."
Funny that they are the ones announcing BayStar putting the pinch on them. Guess they want to put the "positive spin" on it, just like everything else...
Re:SCO ON SALE! (Score:5, Informative)
Official loser (Score:5, Informative)
Re:SCO ON SALE! (Score:2, Informative)
Part I Section 1233.-- Gains and Losses from Short Sales [irs.gov]
PDF format
Linux users must celebrate. (Score:5, Informative)
Re:SCO ON SALE! (Score:0, Informative)
If something goes from 2 to 4, did it double, go up by 2, or grow exponentially?
If you say it dropped 10.56% and it was at 100 before; or, if it was at 20 and dropped 10.56%, they tell a lot more.
This is why you should say, "it dropped from x to y, or 10.56%." Figures can lie and liars can figure.
Re:hopefully (Score:1, Informative)
Chapter 11 might enable SCO to drag things out a bit longer in bankruptcy, but one fact would be hard to erase - the fact that the company is bankrupt. On the other hand, Boise, Microsoft, and others, might try to pick up the pieces and continue litigation.
Whatever happens - SCO isn't going to go away as soon as some of us would like. And besides, they'll just be replaced by another Microsoft proxy or even (eventually) Microsoft itself.
Re:MOD PARENT DOWN spam in .sig (Score:-1, Informative)
Re:The future for SCO: Street.com article (Score:5, Informative)
According to the Street.com article "BayStar Says SCO Breached Note" [thestreet.com]:
(emphasis added) Thus, even if SCO eventually prevails over Baystar this may still sink SCO. SCO won't be able to obtain enough funding to battle IBM, et al.
Re:Why they'd be doing this now? (Score:5, Informative)
Disclaimers:
1) I am not an investment banker.
2) I have no idea what the precise lending terms were; on the other hand, I'm confident that the people behind "talk on the boards" also have no idea.
Re:A shame really. (Score:1, Informative)
Then what many predicted would finally happen: SCO suing themselves (technically).
The 45-day deadline is also coming up... (Score:5, Informative)
... where SCO has been ordered to: [groklaw.net]
It's a tall order. I foresee a lot of coffee drinking and nail-biting this weekend, whether or not the smoking suitcase [groklaw.net] is full of evidence.
Re:The joy! (Score:2, Informative)
Re:Why they'd be doing this now? (Score:5, Informative)
1. SCO lied about their status
2. SCO didn't disclose everything about their status
3. There was disparity between press releases and the truth
Sounds like what we knew all along...
(The sections that baystar claim have been breached are:-
2(b)(v)
(v) Original Purchase Agreement. Excluding the representations and warranties set forth in Sections 3(a), (b), (d), (e), (i), (y) and (z) of the Original Purchase Agreement, the representations and warranties of the Company set forth in Section 3 of the Original Purchase Agreement (the "Original Representations and Warranties") are each true and correct as of the Closing Date, in each case as if made on the Closing Date.
2(b)(viii)
(viii) Disclosure. All information relating to or concerning the Company and/or any of its Subsidiaries set forth in this Agreement or provided to the Purchasers in connection with the transactions contemplated hereby is true and correct in all material respects, and the Company has not omitted to state any material fact necessary in order to make the statements made herein or therein, in light of the circumstances under which they were made, not misleading. No event or circumstance has occurred or exists with respect to the Company or its Subsidiaries or their respective businesses, properties, prospects, operations and financial conditions, which has not been publicly disclosed but, under applicable law, rule or regulation, would now be required to be disclosed by the Company in the Company's Annual Report on Form 10-K.
3(g)
(g) Press Release; Publicity. The Company shall issue a press release (the "Press Release") describing in reasonable detail the transactions contemplated hereby as soon as practicable on or after the date hereof, but in no event later than the commencement of the first trading day following the date hereof. The Press Release shall be subject to prior review and comment from BayStar Capital II, LP ("BayStar"). Within two days after the Closing Date, the Company shall file a Form 8-K with the SEC concerning this Agreement and the transactions contemplated hereby, which Form 8-K shall attach this Agreement as an exhibit to such Form 8-K (the "8-K Filing"). From and after the Press Release, the Company hereby acknowledges that no Purchaser shall be in possession of any material nonpublic information received from the Company, any of its subsidiaries or any of its respective officers, directors, employees or agents, that is not disclosed in the Press Release. The Company shall not, and shall cause each of its subsidiaries and its and each of their respective officers, directors, employees and agents not to, provide any Purchaser with any material nonpublic information regarding the Company or any of its subsidiaries from and after the Press Release without the express written consent of such Purchaser; provided, however, that a Purchaser that exercises its rights under Section 4(n) of the Original Purchase Agreement shall be deemed to have given such express written consent. No Purchaser shall have any liability to the Company, its subsidiaries or any of its or their respective officers, directors, employees, shareholders or agents for any such disclosure. Subject to the foregoing, neither the Company nor any Purchaser shall issue any press releases or any other public statements with respect to the transactions contemplated hereby; provided, however, that the Company shall be entitled, without the prior approval of any Purchaser, to make any press
Re:Tornado Effect (Score:5, Informative)
[This has been a public service message from the heart of Tornado Alley.]
Re:A shame really. (Score:4, Informative)
sPh
Probably not (Score:4, Informative)
NB: shorting a stock consists of "selling" shares you don't own. You can then "buy" them at a lower price. The poster sold at $17 and can buy back today at roughly $9, making $8 a share.
Yes, this means that the poster effectively owns negative shares.
It's the smart thing to do with SCO stock if you think they're full of shit. But it's risky: if the lawsuit has merit (yeah, I know, it's ridiculous, but bear with me) and the shares shoot up to $40 each, the poster is out just a ton of money.
Re:Watch it fall! (Score:4, Informative)
The reason is that short orders eventually have to be closed. To close a short order, you have to buy the stock. You can even put a stop order in so that when it hits below a certain price, your buy order is executed, locking in your profits. This causes automatic support, and probably accounts for most of the buying side of the stock today.
Nevertheless, the value of the stock will prevail. Thus, no matter how many short positions there are to cover, the stock will continue to drop over time if its value is deemed to be lower. In this case, the short positions will simply slow down the inevitable.
Re: Sections 2(b)(v), 2(b)(viii) and 3(g) of the . (Score:5, Informative)
A less flippant summary:
2(b)(v) "You didn't outright lie to us about what you said about yourself in the original purchase agreement."
2(b)(viii) "You didn't omit any material fact that would make what you say about yourself misleading. You also haven't withheld from the public information you are required to disclose by law."
3(g) "You won't provide non-public information to us after the press release."
Not that I don't find yours more entertaining.
Re:The timing is late (Score:4, Informative)
Re:SCO ON SALE! (Score:3, Informative)
Re:Tornado Effect (Offtopic, sorry!) (Score:2, Informative)
More recent studies show that the high winds are in fact the problem, not the pressure imbalance. So no need to get your carpet wet during the next blow...
Re:Why they'd be doing this now? (Score:3, Informative)
A lien is an encumberance to some type of property (real or personal), preventing its sale or other disposition until the terms of the lien are satisfied. So, you'd escrow the funds with the court until they decide who gets what (which is atypical), or in the absence of funds, a judgment would be issued, which would then entitle the judgment holder to execute upon the real and personal property of the loser. Thus, depending upon your state of residence, may include the right to file a lien, execute (i.e. take) on personal property or cash, or even foreclose upon the real property of the loser.
There's a whole host of caveats that I won't go into here, but no one's going to shell out any money for a while in this case simply because our courts move too slow, and SCO is going to counter-sue and also allege a breach of contract on Baystar's part. This is not going to slow down the SCO train in the interim by any means. But down the road it may be the final straw that puts SCO out of business, since most of their frivelous lawsuits should have been dismissed by then.
Re:Que (Score:3, Informative)
No, he means (and you meant) "queue".
From the American Heritage Dictionary:
cue : 1. A signal, such as a word or action, used to prompt another event in a performance, such as an actor's speech or entrance, a change in lighting, or a sound effect.
That's what I meant. What did you mean?
SCOX trading graph (Score:3, Informative)
http://finance.yahoo.com/q/bc?s=SCOX&t=1d [yahoo.com]
Re:Why they'd be doing this now? (Score:5, Informative)
Original Agreement [sec.gov]
Modified Agreement [sec.gov]
Re:Tornado Effect (Score:4, Informative)
I know this is off-topic, but this particular myth bugs me because people have died doing stupid things like trying to open their windows when a tornado came instead of taking proper shelter. (The idea being that the pressure won't affect the house if the windows are open and the air can escape)
Re:A shame really. (Score:5, Informative)
"For ten years, I did all of the GPL enforcement work around the world by myself, while teaching full time at a law school. It wasn't hard, really; the defendant in court would have had no license, or had to choose affirmatively to plead my license: they didn't choose that route. Indeed, they didn't choose to go to court; they cooperated, that was the better way. My client didn't want damages, my client wanted compliance. My client didn't want publicity, my client wanted compliance. We settled for compliance all the time. We got compliance all the time."
Basically, when faced with actually going to court, people violating the license have always come to the conclusion that they couldn't win.
sucker list (Score:1, Informative)
Royce & Associates, Inc., $27M* in SCOX stock
Krevlin Advisers, LLC, $5.1M* in SCOX stock
Legg Mason Inc., $4.9M* in SCOX stock
Oppenheimerfunds, Inc, $2.4M* in SCOX stock
(* value subject to dramatic change, fund managers subject to losing all credibility)
Meanwhile, the crooked fund managers manipulate the stock so that the Director and VP can exercise their options and unload before the stock hits rock bottom Insider Transactions [yahoo.com].
Check your mutual funds people. Don't do business with companies that are taking your money so some VP and SCO can throw a party with a peeing ice sculpture.
Novell share of Microsoft and Sun license fees (Score:3, Informative)
I wonder how long they can procrastinate on this before Novell asks for a court order to at least put this money in escrow? This, not the BayStar move, might be what finally makes it impossible for SCOG to maintain its litigation. Please Novell, do not take such action until SCOG's attack on the GPL has been well and truly demolished.
Re:mod parent up (Score:2, Informative)
Upon filing of bankruptcy petition, all legal actions being taken or to be taken against debtor are halted, no new lawsuits can be commenced and ongoing proceedings of judicial or quasi-judicial nature are halted. Bankr.Code, 11 U.S.C.A. 362(a).
Hope that helps.
--AC
Re:MOD PARENT DOWN spam in .sig (Score:1, Informative)
Oh, did his post have an advertisement in the
Re:karma (Score:5, Informative)
The Baystar deal has a stock price trigger (Score:5, Informative)
-
If the Closing Sales Price of the Common Stock is less than $10.50 (as adjusted to reflect any stock dividends, distributions, combinations, reclassifications and other similar transactions effected by the Corporation in respect to its Common Stock) for at least twenty (20) consecutive trading days, the Corporation shall have the right to redeem any shares of Series A-1 Preferred Stock then outstanding at price per share of Series A-1 Preferred Stock equal to the Face Amount plus all accrued and unpaid Dividends thereon through the closing date of such redemption.
OK, has that happened? Almost, but not quite. Look at the closing price data [yahoo.com]. From 9 March 2004 to 2 April 2004, there's a string of 19 days with a closing price below $10.50. Now we see why SCO frantically tried a stock buyback program, which pushed the price above the threshold for a mere three days.But there's a clause in the Baystar agreeement that prohibits SCO from doing most share repurchases.
This is going to get very ugly. Probably on Monday. When, remember, SCO finally has to disclose to IBM and the court what the claimed "infringing code" is. That deadline is tomorrow.