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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 Big Toe (112240) on Friday May 07, 2004 @04:32PM (#9088708) Journal
    Haha!
    • as apparently Mr. Burns is running SCO and has a whole team of Homer Simpsons working for him. :)
    • 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 tkrotchko (124118) * on Friday May 07, 2004 @07:05PM (#9090000) Homepage
        Remember that IBM may have a substantial claim against SCO, Novell, claims it actually owns the IP, and even Red Hat may get a whack.

        Best case scenario is (a) Novell does in fact show that it owns SYS V (because all claims against Unix would be gone because Novell has released GPL code (b) IBM wins the suit and owns the remaining SCO assets (c) Daryl freaks and essentially closes the company (d) Baystar is left holding the bag (e) some DA grows a set and starts an investigation and indicts a lot of people

        You've got to admit, that would be justice in every quarter. Complete win for Linux.
    • by Anonymous Coward on Friday May 07, 2004 @06:04PM (#9089637)
      In A.D. 2003
      War was beginning

      Darl: What happen?
      Blake: Somebody set up us the DDOS.
      Mark: We get signal.
      Darl: What!
      Blake: Main screen turn on.
      Darl: It's You!!
      Linus: How are you gentlemen!!
      Linus: All your IP are belong to us.
      Linus: You are on the way to destruction.
      Darl: What you say!!
      Linus: You have no chance to survive make your time.
      Linus: Ha Ha Ha Ha ....
      Darl: Take off every 'IP claim'!!
      Blake: You know what you doing.
      Darl: Move 'IP claim'.
      Darl: For great injustice.
  • by pegr (46683) * on Friday May 07, 2004 @04:32PM (#9088710) Homepage Journal
    This is the end
    Beautiful friend
    This is the end
    My only friend, the end

    Of our elaborate plans, the end
    Of everything that stands, the end
    No safety or surprise, the end
    I'll never look into your eyes...again

    Quite appropriate, don't you think?
    • by freeze128 (544774) on Friday May 07, 2004 @04:44PM (#9088877)
      Utah. Shit. I'm still in Utah.
    • by daeley (126313) * on Friday May 07, 2004 @04:44PM (#9088882) Homepage
      People are strange when you're Darl McBride
      Linux looks ugly when you're alone
      IBM seems wicked when you've just sued them
      Wall Street is uneven when your stock is down

      When you're Darl
      Lawyers come out of the rain
      When you're Darl
      No one won't curse your name
      When you're Darl
      When you're Darl
      When you're Darl
      • by Anonymous Coward on Friday May 07, 2004 @05:13PM (#9089196)
        You know that it would be untrue
        You know that I would be a liar
        If I was to say to you
        Torvalds is a thief and a liar

        Gotta stop Linux or I'm fired
        Gotta stop Linux or I'm fired
        Try to set the source on fire

        The time to litigate is through
        No time to wallow in the mire
        Try now we can only lose
        And our company become a funeral pyre

        Gotta stop Linux or I'm fired
        Gotta stop Linux or I'm fired
        Try to set the source on fire, yeah

        The time to litigate is through
        No time to wallow in the mire
        Try now we can only lose
        And our company become a funeral pyre

        Gotta stop Linux or I'm fired
        Gotta stop Linux or I'm fired
        Try to set the source on fire, yeah

        You know that it would be untrue
        You know that I would be a liar
        If I was to say to you
        Girl, our lawyers couldn't get much higher

        Gotta stop Linux or I'm fired
        Gotta stop Linux or I'm fired
        Try to set the source on fire
        Try to set the source on fire
        Try to set the source on fire
        Try to set the source on fire
        Try to set the source on fire

    • by Shakrai (717556)

      I'll catch hell and lose all my karma for this but perhaps we shouldn't be so quick to cheer this on. Darl is an evil bastard but I feel bad for the people who have the misfortune of working there (and who might not have anywhere else to go -- the economy sucks) that are about to get pink slips because of his ill-advised legal battle against IBM.

      I doubt you'd be so quick to cheer if a member of your family worked for them -- or if you owned stock and have been watching Carl & Co. run it into ground.

      • by pr0c (604875) on Friday May 07, 2004 @04:50PM (#9088941)
        If I were an employee there I would have been looking for a new job for months and months and months... Not because I hate SCO but because I would consider the job to be too unstable. If they couldn't have the foresight to do the same... screw em.
        • by DaHat (247651)
          and who might not have anywhere else to go -- the economy sucks

          You make it sound so easy. Regardless of how much ones job may suck, finding another one is rarely easy these days. By your statement, I do not think you have much experience in the real world as what you said is far easier said then done.
        • by Shakrai (717556) on Friday May 07, 2004 @04:59PM (#9089049) Journal

          If I were an employee there I would have been looking for a new job for months and months and months... Not because I hate SCO but because I would consider the job to be too unstable. If they couldn't have the foresight to do the same... screw em.

          "Screw 'em"? Nice attitude. What if they have been looking and can't find another job? And my comment gets modded down? Geesh!

      • by el-spectre (668104) on Friday May 07, 2004 @05:10PM (#9089168) Journal
        Most of us aren't cheering because someone is losing their job, but because the company that is being such a shit is in trouble.

        Kind of like how you might feek bad for telemarketers (the employees), but were happy when the do - not - call list went into effect.
      • by digitalmuse (147154) on Friday May 07, 2004 @05:26PM (#9089310)
        while I can understand your argument, and I agree that this does not bode well for the company's employees, I still think that in the long-term this is the 'best' course for this whole sorrid affair to follow.
        yes, it has nasty repercussions for the folks in the SCO cube-farm, but what kind of legal seal-bashing would be encouraged by letting SCO get away with this? If they got away with it this time, some other C?O with an ichy palm would think that these kinds of anti-FOSS/GPL antics were a neat way to mint money. Can you imagine the digital landscape in 2-5 years if we let Darl cart away the cash because big-bully-bill set him up to take cheap shots at the penguins?
        Perhaps BayStar will be a little bit more thorough in vetting the business plans of the companies they invest in? Maybe people will stop trying to rewrite/reinterpret their old contracts to get a better footing for creativity killing lawsuits? Maybe companies will return to the good old days of creating and selling products that consumers want and are willing to pay for, not just threatening people with lawsuits from ToonTown, UT.

        Yes, our fellow techies are losing their jobs, but did you ever cry over Vader's poor unknowning Stormtrooper henchmen as they ate blaster-fire like the faceless minions they are? C'mon, if you're an employee of a company pulling antics like SCO, then you should either get your CV in order and start seriously looking for employment elsewhere or just lie down like a dog and get the whuppin' that's likely to come down the tracks.
      • by slam smith (61863) on Friday May 07, 2004 @05:29PM (#9089340) Homepage
        I have a few friends who use to work for Caldera. They were real Linux people. A few monthes before the law suits started, they all started bailing out. I suspect that the people left there in the Utah offices are mostly just there to feed the lawsuits. I really don't have a lot of sympathy for them. Of course the don't seem to be the ones getting laid off.

        SCO is doomed with or without Darl. The sooner this ends the better. Think of all the resources this is wasting in companies like, IBM, Novell, DaimlerChrysler, Autozone, SGI, Redhat, etc. That could be much more profitably put towards new products, R&D, etc. How many new jobs might be created, instead of wasted on these legal struggles?

        And whil
      • by Uber Banker (655221) on Friday May 07, 2004 @06:00PM (#9089607)
        the economy sucks

        The economy most certainly does not suck. These are not the dot com days, but that was fantasy land anyway and best not returned to (it will only cause another crash). Non-farm payrolls today were excellent, the unemployment remains at 5.7% (low), interest rates are low and rises over the next two years will be gradual and low in historical terms. The household balance sheet is robust, consumer spending reasonable and corporate investment good. Successful global trade has the benefit of keeping prices of goods and services down allowing income to be spent on even more.

        The economy most certainly does not suck.

        Besides, a company losing 10% of its ~270 employees is less than the local fast food store going out of business... at least the employees of the local fast food joint had more belief in what they were doing - any SCO employee with ethics would have got out far sooner.
    • by Da Fokka (94074)
      This is why the germans invented the term 'schadenfreude'.
  • by LordPhantom (763327) on Friday May 07, 2004 @04:32PM (#9088716)
    ....is Canadian shareholders are wiser than the US ones?
  • Where have you been? (Score:5, Informative)

    by Anonymous Coward on Friday May 07, 2004 @04:33PM (#9088720)
    "Begins layoffs"? Where have you been, SCO has been laying off staff for months now.

    In Santa Cruz, for example, they sliced their tech staff by like 80% or something.
    • by SoSueMe (263478) on Friday May 07, 2004 @04:57PM (#9089026)
      Read the bottom of the "News" item.
      "Source: The SCO Group"

      That's why it began with: "The SCO Group, Inc. ("SCO") (Nasdaq: SCOX - News), a leading provider of UNIX-based solutions and the owner of the UNIX operating system,....

      I almost choked when I read the first line.
    • by AKnightCowboy (608632) on Friday May 07, 2004 @05:07PM (#9089147)
      In Santa Cruz, for example, they sliced their tech staff by like 80% or something.

      How will this affect the release schedule for the next minor versions of the Linux 2.4 and 2.6 kernels? I've been anticipating Linux 2.6 settling down a bit before I switch and this news of SCO reducing it's tech staff by such a huge amount causes me to question investing so much of my time and energy into upgrading.

      If SCO ceases to exist, will Linux still be available!? Will they open source the code so that a group of volunteers can saddle up and take the reins from this dedicated staff of SCO developers who have put so much time and effort into making Linux the great operating system that it is? Inquiring minds want to know the answers to these questions damnit.

  • who? (Score:3, Funny)

    by name773 (696972) on Friday May 07, 2004 @04:33PM (#9088721)
    man those linux people must be real meanies... harming an innocent nice company like sco. ugh.
  • 10%? (Score:4, Funny)

    by Anonymous Coward on Friday May 07, 2004 @04:33PM (#9088723)
    As Chairman Mao says, "the journey of a thousand li begins with one step."

    --------
    Free mobile porn [steamymobile.com]

  • Finally! (Score:3, Funny)

    by tweakt (325224) * on Friday May 07, 2004 @04:33PM (#9088725) Homepage
    It's about damn time... I guess they couldn't keep the air in the stock price any longer.
  • by Anonymous Coward on Friday May 07, 2004 @04:33PM (#9088729)
    Man, that's a lot of attorneys out of work!
    • by Anonymous Coward
      No, no - you've got it wrong. No attoneys were fired.

      I think their workforce USED to be 90% attorneys.

      With 100% attorneys, they're a prime example of the new breed of IT company. The IT industry used to be heavy on the technical side, but the new trend is to be heavy on the (protection of) information side.

      (the above is meant to be funny)
  • by wowbagger (69688) on Friday May 07, 2004 @04:34PM (#9088740) Homepage Journal
    This news has me smilin' like the Enzyte Guy!
  • 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?
    • by Anonymous Coward
      Methinks it would be smart not to say "SCO's IP claims are meritless" while you still own so many shares of SCO stock. They can tell the truth AFTER they get their money back.

      Then again, it would be SMARTER never to have had the stocks in the first place...
  • by unixwin (569813) on Friday May 07, 2004 @04:35PM (#9088760) Homepage
    The link Slasdot.org [slashdot.org]

    or just the quote below...


    Differently seen companies chasing their tails in copyright infringments, trade protocol violations and intellectual property rights are generally the ones which are going to fall pretty soon.

    Short on cash and not being able to earn/fund the millions they were used to in the dotgone era they are metamorphosing into scavengers and opportunists ....
    SCO is a shining example The crummy economy is bringing out the best in a lot of Companys, their legal team thinks, "we are getting irrelevant (as a team) , lets think up something to make some money and make sure we dont' get laid off," "hmmm... patent # 5551212 seems to be worth looking into" and there starts their Road to Hell [lyricsdepot.com] [lyricsdepot.com]

    Easy money (or so they think) ,lot of publicity (for sure) and a lot of hits on their website , so there's a new concept for you

    the legal team is now the marketing team

    • 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.
  • by jcrash (516507) * on Friday May 07, 2004 @04:35PM (#9088763)
    Ouch - currently, 50% [yahoo.com] of the total float of SCOX (the SCO Stock) is shorted.

    So, for every person betting it is going to go up, there is someone betting it will go down.

    • by Jonboy X (319895) <jonathan,oexner&alum,wpi,edu> on Friday May 07, 2004 @04:52PM (#9088957) Journal
      The scary thing about that statistic is the idea of a short squeeze [investorwords.com]. Basically, that means that if the price rises a bit, maybe some people are forced to buy back the stock, 'cuz they don't have enough money in their margin account to cover the stock's value anymore. This buy bumps the price some more, and now the next guy has to cover. It's hardly ever an issue, but 50% short interest is pretty much unheard of.

      Of course, for this to happen, the stock price would actually have to go *up* first...
    • by jjo (62046) on Friday May 07, 2004 @04:57PM (#9089029) Homepage
      Not only that, but the short ratio is almost 14 days. That means that if everyone else stopped buying, and all the shorts started buying to cover their positions, it would take two weeks of normal trading volume to cover them all. We still may see someone try a short squeeze.

      Aside from that, it seems that the only reason that people are still holding SCOX is to get some more money out of whoever has been manipulating the stock price for the past year. That's the only explanation I can see for SCOX not being the penny stock it was (and will be again).
    • by schon (31600) on Friday May 07, 2004 @05:03PM (#9089100)
      for every person betting it is going to go up, there is someone betting it will go down.

      And as ~46% of the stock is held by insiders, it tells me that a whopping 92% of shareholders who aren't insiders think it's gonna go down.

      Thems not good numbers. :o)
    • 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 quali

  • by Anonymous Coward on Friday May 07, 2004 @04:35PM (#9088765)
    ... that none of those layed off are lawyers?
  • by BuddieFox (771947) on Friday May 07, 2004 @04:36PM (#9088775)
    "The Santa Cruz Sentinel is reporting, SCO is laying off 10 percent of its worldwide workforce."

    I guess they are laying of lawyers in Germany then? :)
  • by cwernli (18353) on Friday May 07, 2004 @04:36PM (#9088779) Homepage
    Even if they weren't everybody's darling, they at least didn't manufacture any weapons.
    • Think how much loss in revenue to Linux companies they created ... There are quite a few executives who thought "let's wait until the trial is over before we make any move to Linux".

      Such lawyers destroy, people employed by Linux companies create, and generate real economical value.

  • by Anonymous Coward on Friday May 07, 2004 @04:37PM (#9088787)
    Remember, they still have a decent chunk of money in the bank. Until that's gone, this isn't over.
  • stock price (Score:5, Interesting)

    by bhny (97647) <bh@us[ ]et ['a.n' in gap]> 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 3Cats (113616) on Friday May 07, 2004 @04:39PM (#9088809)
    Minion to Darl:

    ".. We've analysed their attack sir, and there is a danger. Should I have your ship standing by?"

    3C
  • by JMZorko (150414) on Friday May 07, 2004 @04:39PM (#9088818) Homepage
    I live in Santa Cruz, and know some of these people who were laid off recently. I don't like what SCO is doing, either ... and I have fond hopes that they fail miserably with regards to their Linux IP litigations. Still, some good friends of mine are now without work, without prescription benefits, and in this jobless recovery, without much hope. I feel very badly for them.

    Regards,

    John, human

    • by DAldredge (2353) <SlashdotEmail@GMail.Com> on Friday May 07, 2004 @04:44PM (#9088879) Journal
      Tough Shit. They where working for the devil and they knew it.

    • Even worse who realy wants to hire anybody with the taint of SCO on there resume? I'm not saying they didn't have some good people but lets face it managers do look at where your comming from and if your laid off from SCO that tell me that you were to dumb to leave let me correct that run while sending your resume to every head hunter you have ever known, away from that ship. Moral is start thinking about leaving when your company goes bad not when they lay you off as they tank.
    • Jobless recovery my ass

      April employment stats released this morning reveal 625K new nonfarm jobs [yahoo.com] the last two months.

      And with unemployment currently at 5.6% [bls.gov], that's lower than it's been the last 30 years, [bls.gov] excluding the dot-com bubble 1996-2001. (You'd be hard-pressed to find an economist who would indicate that unemployment of 4.2%, as we had in 1999, is good for the economy, much less sustainable.

      If your friend can't find a job, perhaps he needs to switch location, career, or both. It's quite possible
    • by molarmass192 (608071) on Friday May 07, 2004 @05:00PM (#9089066) Homepage Journal
      Ironically, your friends in Santa Cruz had absolutely nothing to do with Darl and his foaming-at-the-mouth Linux vendetta yet now they're the ones paying the price. The silver lining is that SCO as a company is finished, so leaving the company was inevitable. Still, I know lots of people out of work and it's still very hard out there, regardless of all the "Jobs Growth" headlines in the papers.
    • You missed the news... the jobless recovery is over. The latest jobs report showed aggressive growth.
    • by Snap E Tom (128447)
      "Can't shake the Devil's hand and say you're only kidding."
    • by ChangeOnInstall (589099) on Friday May 07, 2004 @05:37PM (#9089401)

      I live in Santa Cruz, and know some of these people who were laid off recently. I don't like what SCO is doing, either ... and I have fond hopes that they fail miserably with regards to their Linux IP litigations. Still, some good friends of mine are now without work, without prescription benefits, and in this jobless recovery, without much hope. I feel very badly for them.

      Regards,

      John, human


      It can be a terrible thing for someone to lose their job, especially given that they probably were in ideal positions before Darl came along. But honestly, these folks shouldn't be at all surprised that they are being laid off. The writing has been on the wall for about nine months now, and for the last six or so it should have been blatantly obvious that anyone who doesn't add value to the litigation should not even count on a short term future with SCO.

      I feel bad for these folks because the management decided to wreck their company, but that happened last year.
  • by Anonymous Coward on Friday May 07, 2004 @04:40PM (#9088825)
    "The Series A-1 stock was purchased at a price of $1,000 per share, and will be converted to common stock based on a conversion price of $13.50 per share." Now.. I'm a stock market clod.. SCOX is currently trading at 6.. It's already lost 58ish percent. At least BayStar knows that the loss is covered.
  • by yorgasor (109984) <ron@nOSpAm.tritechs.net> on Friday May 07, 2004 @04:40PM (#9088826) Homepage
    I came across this old Calvin and Hobbes strip and wondered if this [yorgalily.org] is how SCO's planning meeting went

  • by Phidoux (705500) on Friday May 07, 2004 @04:42PM (#9088849) Homepage
    ... that MS is going to end up buying SCO. Then MS will probably GPL Unix, drop all the IP suits and end up trying to look like the good guys.
  • Bert Young (Score:5, Informative)

    by Jonboy X (319895) <jonathan,oexner&alum,wpi,edu> on Friday May 07, 2004 @04:42PM (#9088850) Journal
    Just so ya know, Bert Young has a experience in helping companies that are basically dead in the water keep up the illusion of growth right up to the moment of reckoning. The GL has a story on it here [groklaw.net].
  • by Salo2112 (628590) on Friday May 07, 2004 @04:42PM (#9088853)
    1. Stop suing them.
    2. Then start selling an actual product.
    3. Profit.

    I can't wait to see how Laura Didio spins this one as a plus for SCO.
  • by Kozar_The_Malignant (738483) on Friday May 07, 2004 @04:43PM (#9088866)
    I prefer to own stock in companies that:
    • Have a product
    • that is involved in sales
    • to customers
    • generating revenue
    SCO seems to have none of these things.
  • 10% is nothing... (Score:5, Informative)

    by taped2thedesk (614051) * on Friday May 07, 2004 @04:44PM (#9088883)
    ...compared to the past year:

    From SCO.com:
    Q. How many people does The SCO Group employ? A. As of April 30, 2003, 339 employees.

    From the article:
    Stowell said the cuts totaled less than 10 percent of the company's total worldwide work force of 275. There were cuts, however, earlier in the quarter as well. In March the company reported 305 employees, including 73 in Santa Cruz.

    339 - 275 = 64 positions gone from April 2003 to May 2004, not including these layoffs. Jeez.

  • Martyrdom (Score:5, Insightful)

    by AndyCap (97274) on Friday May 07, 2004 @04:45PM (#9088887)
    I do fear that the next spin on this will be martyrdom, Poor little SCO couldn't get justice before it was forced to its knees by the brutal linux movement sponsored by the behemoth IBM, or something to that effect.
    --
    • Re:Martyrdom (Score:5, Insightful)

      by Anonymous Coward on Friday May 07, 2004 @05:31PM (#9089362)
      You must have been reading the writings of Enderle (the not-so-savvy tech analyst).

      He's been saying pretty much that for a while now. Called Linux users terrorists because he got hatemail for being a moron (well, he had more "justification" than that, but what I just said is pretty much what it boiled down to in the end...) I think they're his favorite scapegoats because they often point out how dumb he is, and that threatens his livelihood of writing BS articles...

      In case you're wondering, why yes, I did spend quite a while researching him to see what his connections to SCO were after he started writing some of this nonsense. My conclusion was that he's not being paid by anyone, he's just a contrarian type who liked generating some controversy, because people calling him stupid reinforces for him the idea that he's smarter than them all, having "seen through" whatever "popular misconception" he's writing about today.

      The best strategy for refuting him is to stick to points of provable, technical error (e.g. those points which do not depend on oppinion at all, however well-founded that oppinion might be) and politely call him on them. Preferably every single time he makes those mistakes (and trust me, there are plenty...). In doing so, CC whoever he's writing for (since he does guest columns and such, mostly), and chide him for not doing better fact-checking.

      In other words, avoid any sort of ad hominem, and stick to the facts. Enough of that might get publications to reconsider his role as an "analyst" ... at least those publications who wish to be accurate (Forbes, etc. need not apply).
    • 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 Eggplant62 (120514) on Friday May 07, 2004 @04:49PM (#9088930)
    The party starts now. Anyone who knows where I live, is welcome over here for a drink.
  • Well... (Score:5, Informative)

    by QuasiCoLtd (727325) on Friday May 07, 2004 @04:52PM (#9088967)
    According to Zdnet [com.com] those being laid off are mostly in the engineering, marketing, and sales depatments. This is very telling for a so-called "tech" company to lay-off those responsible for creating and selling your core product. Of course we all know that SCO is a litigation company and has no need for engineers to improve a product, no marketers to hype the non-existant product, and no salesmen to.... well you get the idea.
  • by PetoskeyGuy (648788) on Friday May 07, 2004 @04:58PM (#9089048)
    Managerial Aptitude Test

    Q. Your the captain of a ship commanding 100 sailors. Your carrying valuable cargo you need to sell for the owner of the ship. It appears there is a hole in your ship and water is coming in fast. What's do you do?

    A. Find out what's wrong and fix it
    B. Tell the sailors to start bailing water and sing something happy while they do it
    C. Start looking around for at the other ships pilot since this once hasn't got long
    D. Move the Cargo to your personal dingy and set sail
    E. Tell everyone "This is not happening, everything is normal, the ship cannot be sinking, we take precautions, you know" and remain calm. (Erik the Viking)
    F. Start throwing sailors into the sea until to lighten the load?
  • A bad thing? (Score:5, Insightful)

    by tlambert (566799) on Friday May 07, 2004 @05:01PM (#9089075)
    Just to add another point of view... this may be a bad thing.

    [usual disclaimers here; I'm a layperson who has to deal with issues related to things like this occasionally]

    The difference between a real company and an intellectual property holding company is that a real company has some skin in the game when it comes to treating patents as trading cards. An IP holding company doesn't.

    As a simple example, consider two companies, "A" and "B", with a patent portfolio of 100 patents each, and real products that they are trying to sell.

    When company A says to company B "you're infringing patent A17", B can use its portfolio defensively, and come back with "yes, but you're infringing patent B34; let's trade licenses".

    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.

    The only place this isn't true is where B has some IP that A acknowledges is the basis of derivative IP held by A, _and_ A values the ability to continue sublicensing it without B raising sublicense fees for the original work in response to the extortion suit.

    IF SCO is, effectively shedding their vulnerable assets, and IF they really have IP assets, this could be an entrenchment where it could end up being very hard to dig them out for a very long time.

    The only real recourse to this sort of business model is for company B to attack companies that are infringing B's portfolio, and which are owned by the same people who own company A - effectively countering extortion with blackmail.

    Yeah, I'm one of those people who think we need intellectual property law reform.

    -- Terry
  • by gearmonger (672422) on Friday May 07, 2004 @05:02PM (#9089085)
    Will the last lawyer out of the building please turn off the lights?
  • All I can say is... (Score:3, Informative)

    by Penguinshit (591885) on Friday May 07, 2004 @05:05PM (#9089132) Homepage Journal

    ...ouch... [yahoo.com]

  • by Saeed al-Sahaf (665390) on Friday May 07, 2004 @05:11PM (#9089180) Homepage
    Good Lord. RBC is not divesting itself of SCO stock. They are converting preferred to common. Whole different thing.
    • by MyHair (589485) on Friday May 07, 2004 @06:03PM (#9089629) Journal
      They are converting 1/3 of their preferred stock at an enormous loss (13.50 vs. curent price 5.94) and selling 2/3.

      The prevailing presumption is that they sold the 2/3 at a loss and will strategically dump the common stock. Keeping the common stock after a move like this wouldn't seem to make sense, but there is probably more going on than any of us know.

      So they divested 2/3 of their stock for unknown terms, lost some benefits of the PIPE deal and are holding 1/3 of their original investment at >50% loss over 7 months. They presumably had the option to force redemption like Baystar, and being the majority investor would get their slice of the pie first. Instead they wait to weeks and pull this. Sounds like they're cutting their losses and splitting to me.

      But admittedly that's not certain yet.

      My best guess is that RBC prefered cutting losses and dropping SCOX rather than fighting about redemption, while Baystar has committed to redemption or bullying, and doubling their stock holdings for presumably a nice discount increases their leverage against SCO management and increases their redemption penalty should they win.

      RBC folded, Baystar raised, and SCO is "all in".
  • by menscher (597856) <<menscher+slashdot> <at> <uiuc.edu>> on Friday May 07, 2004 @05:22PM (#9089277) Homepage Journal
    I thought Baystar wanted out? Why would they be buying more stock? Anyone else confused? Or am I missing something obvious?
    • by Cid Highwind (9258) on Friday May 07, 2004 @05:45PM (#9089487) Homepage
      They don't want out. Baystar was using the threat of dumping their stock to keep SCO managment in line. They wanted SCO to halt what was left of their software development and sales operations and "concentrate on IP licensing and enforcment". Darl and co. agreed, Baystar withdrew their threat, and now we're seeing the last of SCO's programmers getting downsized.
  • by Greyfox (87712) on Friday May 07, 2004 @05:30PM (#9089345) Homepage Journal
    Too bad Darl probably won't suffer too badly for driving the company into the ground like this. The risk/reward of being a CEO should be more along the lines of:

    Stock goes up => Big Bonus

    Stock goes down => We get your liver

  • 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.

  • 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.
  • IP (Score:5, Insightful)

    by Dieppe (668614) on Friday May 07, 2004 @07:51PM (#9090240) Homepage
    The company has come under fire in the last year since initiating controversial litigation to protect intellectual property rights on parts of the Linux operating system, source code that had been considered open source or freely exchanged technology. Recently the SCO Group notified companies using the technology in question that they would be sued if they didn't pay up.

    This might be poignant, but at least if I were to murder someone and the news media were reporting on it they would say "...an alleged murderer"... Why can't they say "alleged intellectual property rights" as SCO hasn't proved anything yet and there is still doubt here.

    ----
    SCO... An alleged company with an alleged business plan.

  • 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!

Kill Ugly Processor Architectures - Karl Lehenbauer

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