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Caldera The Almighty Buck

Royal Bank of Canada Cashes Out of SCO; SCO Begins Layoffs 585

Posted by michael
from the so-long-and-thanks-for-all-the-lawsuits dept.
jbell99999 is the first one to submit news that the Royal Bank of Canada is divesting itself of SCO stock. They're selling part of their preferred stock to Baystar, which has already indicated that they want to redeem their shares, and converting the rest to regular stock, which they can presumably sell on the open market. In other SCO news, Versicherung writes "The Santa Cruz Sentinel is reporting, SCO is laying off 10 percent of its worldwide workforce. The cuts come less than a month after the company brought on a new chief financial officer and just before the company ended its second fiscal quarter April 30." See also stories at Eweek and Linuxinsider.com.
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Royal Bank of Canada Cashes Out of SCO; SCO Begins Layoffs

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  • by Anonymous Coward on Friday May 07, 2004 @04:35PM (#9088753)
    He said BayStar had reached "the conclusion that SCO should focus its resources on its most valuable asset: its intellectual property claims."

    I'm sorry, which intellectual property claims were those?

    Does Baystar believe their claims of their source code in Linux are meritable?
  • stock price (Score:5, Interesting)

    by bhny (97647) <bh@NOSPAm.usa.net> on Friday May 07, 2004 @04:39PM (#9088807)
    The strange thing about SCOX stock is the volume is very tiny.
    Today it was 64,035. That's about the equivalent of 2 day-traders flipping the stock back and forth.

    What does that mean? Nobody is interested in buying or selling this thing.
  • by Anonymous Coward on Friday May 07, 2004 @04:40PM (#9088821)
    What people need to realize is that while the Royal Bank of Canada is the indirect cause of the layoffs, the direct cause is still SCO due to their misuse of the Anser Albifrons clause of the DMCA which allows for this behaviour. The previous versions of Linux (2.4 and 2.2), while allowing for activities that are partial to the clause are not stable enough for the Royal Bank to continue to fund the stock trades of the SCO while they are Cashing out as per the title of this slashdot article.
  • Re:Bre-X (Score:5, Interesting)

    by IgnoramusMaximus (692000) on Friday May 07, 2004 @04:43PM (#9088862)
    You got it. Being a Canadian myself I would like to bask in the glory of us as a whole being smarter, better, more educated, more richeous etc., but...

    Although it starts amongst joyous meadows and cheerful flowers, truly great evil this path leads to. Evil bearing names like Abu Gharib and My Lai.

    So just note that it was Royal Bank who against all common sense invested in SCO in the first place. They are just now growing cold feet and preparing to run for the door.

  • Good, but sad (Score:2, Interesting)

    by Rhesus Piece (764852) on Friday May 07, 2004 @04:44PM (#9088874)
    As glad that I am that a company with questionable business practices is getting what is coming to them, it also marks a pile of Linuxey IT workers who are out of a job. I don't care how evil we may think SCO is, there are folks in there just trying to do a good job and support their families. So, before we say, "Hurray! The Enemy is losing!" we should keep in mind that some of our own are amongst their ranks. Err.. were. Also, imagine applying for a job at a linuxey firm.. "Says here you worked for SCO.. they tried to ruin linux, right" "Oh.. it says SCO? That must be a typo." "There is a whole paragraph, in detail.." "It's ALL A TYPO!"
  • by Anonymous Coward on Friday May 07, 2004 @04:47PM (#9088906)
    I said, "Darl I'm here to kill you."

    And he walked on down the hall...

  • Workforce? (Score:1, Interesting)

    by Anonymous Coward on Friday May 07, 2004 @04:48PM (#9088927)
    They had a workforce? What did they make?
  • Re:Bert Young (Score:2, Interesting)

    by snakecoder (235259) on Friday May 07, 2004 @04:51PM (#9088949)
    I did a little googling on Bert Young and two words I don't see in any of his ventures are "profitable business". Hiring that guy seems to be synonymous with writing a suicide note.

    I will miss the entertainment though, sniff sniff.
  • Re:Stupid RBC (Score:5, Interesting)

    by Dav3K (618318) on Friday May 07, 2004 @04:54PM (#9088993)
    I also deal heavily with RBC and almost did switch banks. I stayed with them only because they gave me the best service. However I did shuffle my mutual funds to non-sco funds and was clear about my reasons for doing so. At this point I am just relieved that RBC is no longer involved in this mess .
  • by Anonymous Coward on Friday May 07, 2004 @04:57PM (#9089032)
    I dunno, being litigious bastards makes a disturbing amount of sense from a purely business perspective.

    Litiguous bastards:

    1. Don't need customers, just people to sue.
    2. Don't need to keep good customer relations, just to maintain enough paperwork to sue (former) customers.
    3. Don't need to support a product.
    4. Don't need to develop a product.
    5. Don't need extensive infrastructure. Or an office for that matter, just a desk in a law firm. (Or, take the Simpson's Approach: "Hey, you, get out of my office!" - Lionel Hutts to Homer Simpson, lying in a tipped-over phone booth)
    6. Don't need a lot of capital, just enough to keep the lawyers going until the 'big payoff' comes in the form of a win/settlement.

    Basically, it flies in the face of almost every rule in the business book. You get to make money without doing anything productive towards the economy (no job creation, no product in use, no VALUE). And, of course, this is why litigious bastards MUST fail. We can't get people believing that the world can run off of bullshit and hot air. If you make money, you should make money by DOING something, at least in the bigger picture.

    Even other companies that make money from 'IP' (say, music or software) puts out something for people to use/consume/enjoy/work on. Litiguous bastards don't contribute to the economic equation, they try to rob it, try to leech it dry.

    SCO must be ground into the dust, same as RAMBUS.
  • Re:Yesssss (Score:3, Interesting)

    by justsomebody (525308) on Friday May 07, 2004 @05:05PM (#9089123) Journal
    Actualy, not.

    As one investor is changing non-voting for voting stocks, and the other (Baystar is related to MS) proclaiming that SCO is not experienced to deal these legal situations (and buying first ones stocks).

    In my opinion Baystar;)MS is aiming to prolong this situation as long as possible, and thus buying shares from RBC.

    There might be the change, but probably only about who is leading this fiasco.

    But to be truthfull, I really don't understand why they prolong this. There was no benefit and Linux is still gaining in the same measure as it was (there was some research that showed that)
  • Re:stock price (Score:5, Interesting)

    by peeping_Thomist (66678) * on Friday May 07, 2004 @05:05PM (#9089128)
    Nobody is interested in buying or selling this thing.

    Oh, I'll bet lots of people are interested in selling it, but they can't get their price for it...
  • by Anonym0us Cow Herd (231084) on Friday May 07, 2004 @05:16PM (#9089222)
    An investing question from a non expert.

    If RBC places an order sell these freaking shares at any price, as fast as you can!!! for a volume of 740,740 shares...

    would this potentially affect the stock price?

    in what way might the price be affected?

    what effect, if any, might this have on the long term outlook of the company?

    are there any other concerns a wise investor should have?


    Any good investing tips appreciated. (Especially when they are from an internet site! rather than from someone qualified to give investment advice.)

    Thanks!

  • by Snap E Tom (128447) on Friday May 07, 2004 @05:20PM (#9089252)
    "Can't shake the Devil's hand and say you're only kidding."
  • Re:good (Score:3, Interesting)

    by Hays (409837) on Friday May 07, 2004 @05:24PM (#9089293)
    I think a reasonably smart SCO employ would have been sending out resumes for the past 6 months.
  • What if....... (Score:5, Interesting)

    by zakezuke (229119) on Friday May 07, 2004 @05:38PM (#9089422)
    This is neither a flame nor usual SCO bashing.

    My impression of SCO was it was the product you bought 10 years ago because that power accounting and database software was written for it, dated but does the job and has never rarely failed. Near as I'm aware, they had a somewhat stable customer base, and while they didn't inovate, they started to incorperate much in the way of OSS in order to keep up with the pack, and perhaps actually get some new customers. Selling them old old and true power apps, but save them lots of money by giving them Samba.

    I am curious about one thing. What if SCO never fired the first shot in this IP war? Would they still need to downsize? Would they still be considered a dying company? Would it be possible for SCO to continue to exist supplying to main stream folk or would they have simply continued to fade away? After all a successful company isn't always the one with the most money, but one which has found a balance between supply and demand, much easier with a software company then one which produces a physical product.

  • Re:A bad thing? (Score:3, Interesting)

    by crusher-1 (302790) on Friday May 07, 2004 @05:46PM (#9089489)
    "If company A is an IP holding company, there's nothing company B can do but pay whatever extortionate price: Company A has no product, and is therefore not infringing any of B's IP. B is pretty much hanging in the wind."

    And this might explain why BayStar wants Darl out and for it to essentially (if not actually) drop it's Unix products and "concentrate" on the supposed IP holdings and litigation.

    One of the cheif gripes of the Linux community (other than the initial claims that SCO owns Linux) is that both SCO Linux and Unix products used Open Source software, Apache for instance (as well as a host of other things). So if SCO has no product then your contention may be on spot, as far as not being in a position to fend off counter claims regarding what's in SCO Linux/Unix. If you don't have a product and just have a lot of IP patents then you may be correct.

    However, BayStar may have ulterior motives behind their request for a refund - such as we've just mentioned. But it may be in a position to milk SCO for all it's worth and then bail out. The Bank of Canada is essentially clearing a path to bail out as well IMHO. Bottom line, considering the recent layoffs as well, is that SCO is most likely scrounging for cash. What like lawyers are cheap? They aren't getting any revenue from the license/extortion scheme, they aren't selling a product, they have been black listed by almost (if not all) developers (save those that may still work there - do they still employ any devs?)and essentially have not other revenue channels.

    Let's face it. SCO could potentially drag this out for years. But they need money and aren't making any at the moment. They did get a reprieve via Baystar/PIPE/BOC but that appears to be teneous at best. I think that in 6 months SCO well start to exhibit Cheyne-Stokes breathing - aka the death rattle. The stock was down to around $6/share yesterday and dropping (check that, I just checked again and it's at $5.99/share and falling). Any takers on how long before SCO stock is hovering around the price it was before they started they fiasco? I thought not.

    This should be a wake up call for F/OSS. Watch the code base and keep it clean (though most are already painfully aware of this). The big question is what the hell do we do about the USPTO. They are out of touch and really not geared for handling the wave of technology advancements to date and unable to keep up with the breakneck speed of development and changes. I mean for crying out loud they gave M$ a patent on an Apple - not as in MAC but as in fruit to eat. They claim it was a mistake but it begs the question - what else "don't" they get? And I wonder if SCO and friends are banking on the Judges and Juries in the same manner - hoping they don't "get it" in order to "educate" them the SCO way.

    But of course they appear to be doing with the IP litigation what they did with their software business - that is to run it into the ground with a flaming wake of burned bridges behind them.
  • by ErikTheRed (162431) on Friday May 07, 2004 @05:52PM (#9089538) Homepage
    Ok, so while there is some short-term negative publicity around one major investor bailing, it leaves Baystar capital with much more power over SCO. It's widely conjectured that Baystar's recent abortive bailing-out was actually just a public slap to SCO to get them to make some executive changes. Now Baystar's leverage is increased substantially. It has occurred to myself and to others that what Baystar may be able to do is effectively "foreclose" on SCO - not in the traditional debt sense, but they'll be able to stick a gun to SCO's head and force them to replace board members under threat of Baystar's pulling out, which would effectively bankrupt SCO. Round one - replace the CFO. Round two - put some of our buddies here on the board to provide you with some sage advice.

    Then we have Baystar (the Microsoft puppet) effectively inheriting all of the IP claims (by proxy, but the result is the same), which they think are meritorious. This could result in a whole new round of litigation run by someone who's not a complete jackass.

    The new litigation may (will)also be a complete pile of bullshit, but it still ties things up in the courts for years. Be afraid, very afraid.
  • by FirstOne (193462) on Friday May 07, 2004 @05:52PM (#9089544) Homepage
    "Jobless recovery my ass...April employment stats released this morning reveal 625K new nonfarm jobs the last two months."

    All the claimed job growth is smoke and mirrors.. the globalists are manipulating the survey results.
    It fairly easy to make up fake claims of hiring, especially since they are the one's filling out the DOL questionnaires!!

    Now for a dose of the truth ! [google.com]
    Collected SS receipts.. (You know that little old flat tax on Salaries and wages, no deductibles or exemptions allowed)
    Has not been keeping up with inflation.. (And that's assuming zero job growth in the intervening year !!!)

    That truth link also covers half of April's supposed growth,
    since the DOL survey uses 2nd week of each month as the benchmark.
    (a double whammy..)

    In summary.. you've been conned!!
    Just more job losses and cut backs, buried under a pile of bogus statistics !

  • by twigles (756194) on Friday May 07, 2004 @05:58PM (#9089593)
    I went through a brutal layoff in 2001 and it sucks. There are emails flying all over with personal contact info and people spend all day looking at the Monster boards and finding nothing. Then if McBride is as sleazy as our CEO was he'll call a company meeting a week or two before the whole company implodes and tell everyone that the rumors are all wrong and everything is fine, thus giving the knife a little twist.

    Anyone with an MBA should be dealt with suspiciously - they don't think like us. Let them prove themselves but don't go rushing in believing them right away, and no matter what they tell you they are *not* your friend.

    I feel for these people also because Santa Cruz doesn't look like it is an enviable place to live right now if you're looking for a tech job. Now with all these Unix geeks hitting the street at once I'll know to avoid it for a couple years more.
  • I should hope NOT (Score:4, Interesting)

    by stealth.c (724419) on Friday May 07, 2004 @06:06PM (#9089658)
    It was SCO that kept begging for more time, SCO that kept offering cumbersome, insufficient responses, SCO that kept showing up at deadlines empty-handed, SCO that came up with every excuse it possibly could to never actually be in a court room. IBM has quietly bided its time, patiently giving SCO all the rope it ever wanted. And now, precisely as expected, they hang themselves.

    It shouldn't be difficult to counter the spin when the facts are on your side.
  • by Anonymous Coward on Friday May 07, 2004 @06:35PM (#9089801)

    It's hardly ever an issue, but 50% short interest is pretty much unheard of.

    Hmmm,

    NFLX [yahoo.com] is even more shorted and their prospects are much better than SCOX's.

  • by XorNand (517466) on Friday May 07, 2004 @06:44PM (#9089846)
    +5 Funny on Slashdot. If this were a post on a CIO new site, it would probably be +5 Insightful. I like seeing SCO get kicked in the nuts as much as the next geek. However, understand that to the vast majority of people who only mentally process buzzwords "SCO", "Linux" and "legal problems" are mentally interlinked. This is not a good thing for GNU/Linux any way you slice it.

    Geeks should be praying for this SCO thing to go away quietly, not for them to be flogged in the town square.
  • by rossifer (581396) on Friday May 07, 2004 @06:49PM (#9089875) Journal
    I quit a job that was sucking the life out of me in September 2002. The job market in 2002 appeared much worse than the job market today. It took me until January 2003 to find a better job, and the one I found turned out to be 1500 miles away from my friends and family.

    Sure it was scary to do when the economy sucked and jobs were few and far between. Sure I was worried about how I was going to pay bills (I took a class in bartending just in case). Sure I was freaked out about moving halfway across the country for a new and mostly unknown job. But I did all of those things and so can others.

    Quite simply, there was absolutely no way in hell that I was going to stay in that job. Life is simply too short to spend 8 or more hours a day being miserable. If I worked for SCO before their lawsuit, I'd have been one of the first out the door, with or without a replacement job in hand. There's simply no salary large enough to compensate for your self-respect.

    Regards,
    Ross
  • Job switch (Score:1, Interesting)

    by Anonymous Coward on Friday May 07, 2004 @06:52PM (#9089893)
    My neighbor left his job at a Canopy company located in Lindon, Utah about a year ago, not too long after this got started. Now he works for Novell.
  • From Philadelphia, New York, and Virginia things are pretty bleak if you want to work for anything more than $8/hour.

    I've had companies tell me to my face that they aren't looking from someone with such "Senior" qualifications as mine. Read that they found a kid out of school who doesn't have a family to support and will work for circus peanuts and a pat on the head.

    Keep in mind, I'm 29, and if that qualifies me for being an old-timer in industry I can't imagine what a 45 year old must be going through. I know of more than one former Engineer who is driving a bus right now to make ends meet. Of the 45 year old variety, mind you.

  • by fingerfucker (740769) on Friday May 07, 2004 @07:22PM (#9090092)
    Besides, a company losing 10% of its ~270 employees is less than the local fast food store going out of business...

    Please state your sources every time you claim a fact!!!!

    According to the RBoC stock coversion [yahoo.com], SCO has a business presence in 82 countries with a network of 11,000 resellers and 4,000 developers. While the 11,000 resellers are solution providers, and their developers when dubbed developer network [sco.com] is listed as 8,000 in number, I haven't seen any actual "employees" numbers anywhere.

    You use nothing more but a vague "good" to describe a well-performing economy. That's just pathetic.

    Consumer debt load is at record high [usatoday.com], including mortgage debt. According to the same source (USATODAY), "household debt levels rose nearly 11% in 2003" alone!!! This does not tell good things about household balance sheets [federalreserve.gov]. In fact, consumer debt levels reveal what the balance sheets wouldn't. In this case, they tell you how sh*t-fscked the Americans got, living today on money they will earn tomorrow for years now and it can't get better.

    And when was the last time you checked the 2003 record-high $380 billion dollar deficit [usatoday.com].

    I am not opposing the fact that the economy doesn't suck. But you have not shown it and made close to zero effot (only concrete unemployment numbers)!! You have to know your facts and know what makes a good economy first.

    I will conclude my point by reiterating the fundamentals. I said it once, I'll say it fscking again: State your sources!!!

  • by Performer Guy (69820) on Friday May 07, 2004 @07:24PM (#9090102)
    They've just managed to half their money with this deal, rather than try to get blood out of the SCO stone they're converting to common stock which they're entitled to do, but if you look at the numbers each $1000 preferred share becomes several shares of common stock valued at around $440. Excuse me for finding this hillarious. They thought they could make a quick buck by funsing a viscious and meritless intellectual property attack on IBM and the Linux community in general. Now they're paying the price. I just hope SCO stock tanks some more before these Canadian vultures can cash out.

    As for Baystar trying to get blood out of the stone they helped forge, same story, let's hope they never recoup their cash. Maybe it'll be a lesson to the next bunch of greedy S.O.B.s who think about funding the next group of crooks to come along.
  • by ErikTheRed (162431) on Friday May 07, 2004 @07:25PM (#9090103) Homepage
    Yeah, but you're assuming that A) SCO's actual intent is to win the Lawsuit (and not just FUD Linux), and B) Baystar loves SCO's management and believes in them soooo much that they will let them continue on down their merry path to distruction.

    Bzzzzzzt! Thank you for playing.

    Once Baystar controls SCO, they can have SCO sell their IP "assets" or interests or whatever to another company (let's call it BaySCO). The amount could even be something as ridiculous as CN$1 (a loony for a bunch of loonies). The incoming legal fire from IBM et al turns SCO into a smoking crater, but then BaySCO is free to start the whole process all over again. At this point, IBM & friends can essentially try to get a court to declare (without naming a specific defendant) that there is no infringement, breach of contract, etc., but even the threats down the road are really limited only by BaySCO (and their successors') imagination - keep in mind that the SCO complaints against IBM over the last year or so have changed so much as to not even resemble the original suit filed.
  • by Breakfast Cereal (27298) on Friday May 07, 2004 @07:48PM (#9090209)
    Try that with a family. Try that with kids who have to change schools and make new friends every time you decide you don't like your job.

    Try that with kids and a spouse who also has to work. Are you going to insist that your spouse also dump his/her job and move 1500 miles away? And hopefully find another job there? What if he/she loves his/her job?

    Try that as a single parent when you live close to family members who help you with day care.

    Try that with a sick family member whose medical condition will suddenly become "pre-existing" and not eligible for coverage when you change HMOs.

    In other words, try that when you're not a healthy young 20-something with no strings. Try that when you're like most of the population.

    Hey, I know the feeling of quitting a job that sucked and I was glad I was in a position once to do that once upon a time. It's great! But it's a luxury, and some things are worth sticking with the most soul crushing job in the world.

  • by Animats (122034) on Friday May 07, 2004 @08:03PM (#9090319) Homepage
    There seems to be an effort by somebody to keep the price from dropping below 6.0. Look at the 5 day chart. [yahoo.com] Every time the price dips below 6.0, there's a buy to push it back up to 6, but no higher. Thursday's chart is striking in this respect. It looks like somebody had a limit order in at 6.0. This may be SCO's announced "stock buyback" program. It will be interesting to see the SEC filings for the next quarter, when we find out how much cash went into the buyback.

    SCOX closed at 6.01 on Thursday and 5.99 on Friday. That does look like an effort to maintain the price.

    This only works until SCO runs out of cash, of course.

  • Wait till Monday (Score:4, Interesting)

    by Teahouse (267087) on Friday May 07, 2004 @08:30PM (#9090486)
    They made this announcement after trading hours on Friday, and they already closed below $6 today. If you have a stock tracker, set it to watch SCOX on Monday morning when the market opens. They will easily lose another $.50 by the end of next week. Also, it will be interesting to see how many of the board members quietly dump stock in after hours trading this weekend. Half of them notified the FTC that they would be cashing in stock in small increments. I am betting those increments add up to 150,000 common shares this weekend.

    My friend (the evil capitalist) has said that this has always been a race between winning the legal cases, and the stock hitting the magic $4.50 share price when the market figired out the scam. At $4.50, there would likely be a removal of The Darl and his cronies and a cancellation of all court cases and a demand for a new CEO to turn SCO around by INNOVATING instead of LITIGATING. I am watching to see if he's right. See you Monday!

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