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SCO Granted Hearing on Potential Delisting 191

Posted by Zonk from the plead-for-your-life dept.
Groklaw Reader writes "SCO will be allowed an oral hearing on its potential delisting. The hearing is scheduled for March 17, 2005, so they again show us what they are best at: staving off impending doom. There is no way to predict the outcome of the hearings, but most of the informed speculation is negative, so there are no silver linings in this case. Unless you think they can find some crazy reason to sue the Nasdaq for billions over it..."
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SCO Granted Hearing on Potential Delisting More

SCO Granted Hearing on Potential Delisting

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  • Huh. (Score:5, Insightful)

    by numbski ( 515011 ) * <[numbski] [at] [hksilver.net]> on Friday February 25, 2005 @03:27PM (#11780387) Homepage Journal
    I think that we've seen so much of SCO that we're all collectively out of things to say on the matter.

    Delist them and let them go away. Finally.

    • Re:Huh. (Score:5, Insightful)

      by gstoddart ( 321705 ) on Friday February 25, 2005 @03:31PM (#11780435) Homepage
      I think that we've seen so much of SCO that we're all collectively out of things to say on the matter.


      Delist them and let them go away. Finally.

      Will de-listing do anything to stop their crap? Or would you get a company who is no longer publically listed in court with IBM? If they still have money to try their legal route, de-listing doesn't sound like it affects that.
      • Will de-listing do anything to stop their crap?

        Sure will spell the end of their credibility.

        • Re:Huh. (Score:5, Funny)

          by Tackhead ( 54550 ) on Friday February 25, 2005 @03:53PM (#11780716)
          > > Will de-listing do anything to stop their crap?
          >
          > Sure will spell the end of their credibility.

          ...for values of "credible" that were already approaching epsilon.

          I have to admit I like the "E" that's been added to denote their delisting. SCOXE. Rhymes with "Goatse".

        • Re:Huh. (Score:5, Insightful)

          by Zeinfeld ( 263942 ) on Saturday February 26, 2005 @12:20AM (#11785091) Homepage
          Sure will spell the end of their credibility.

          Come on, will nobody ask why SCO can't produce a simple 10K?

          The only reason SCO is at risk is because they failed to file their accounts on time. That is a very very rare reason for being delisted. Most companies get trashed because they have failed to keep their marketcap above the required threshold ($50 mil??) which SCO seems to be OK on or they fail because their stock price falls bellow $1 for too long which SCO is also OK on.

          So why does a company fail to make its 10K? Its the most basic thing a CEO is required to do. In every case I can recall where this has happened it is because the auditors have refused to approve the accounts.

          This is not a minor issue, it is a bombshell. To fail to get your accounts in means that either the auditor thinks there is something fishy going on or the company does not have the cash on hand to pay their bill. Either way looks bad for SCO.

      • Re:Huh. (Score:2, Interesting)

        by Anonymous Coward
        Well it could open up the possibility of shareholder lawsuits against SCO. It makes them cheaper to buy out. It reflects a lack of confindence in SCO's ability to right itself (either through legal victory, or creating a useful product). It also means it's unlikely they're going to attract investment and prolong this beyond what's already in motion (and appearently winding down).

      • Re:Huh. (Score:5, Insightful)

        by MightyMartian ( 840721 ) on Friday February 25, 2005 @03:38PM (#11780529) Journal
        Even worse, let's just say SCO completely disintegrates. Let's even say, for good measure, that the next year or two is gobbled up with shareholder lawsuits and torture sessions for McBride.

        At the end of it, someone is going to buy up what's left, and possibly even with an eye on the case against IBM. I'd rather that SCO survive long enough to be handed its testicles now, rather than have this ugly demon pop up again in 2007 or 2008.

        • Re:Huh. (Score:5, Insightful)

          by schon ( 31600 ) on Friday February 25, 2005 @05:22PM (#11781753)
          At the end of it, someone is going to buy up what's left, and possibly even with an eye on the case against IBM.

          Yeah, right.

          Name one company who would have the corporate deathwish to want the losing end of a $1B patent/Lanham act lawsuit from IBM?

          Remember that IBM's counterclaims are compulsory - that is, someone can't just buy the "good" part of the lawsuit and ignore the "bad" part - the two are intertwined. MS would have to pay someone a whole hell of a lot of money to touch that.

          "Gates: Hey, I'll pay you $50M to hold this potato for a couple of minutes. Oh, don't worry - I'm wearing these welding goggles for fashion, just ignore the glowing."
        • I think we are all taking this the wrong way. SCO is a company that has worked diligently to protect it's hard won Intellectual Property, (whatever that is). I would like to offer up 28 Discworld MUD copper pieces for their entire inventory of IP.

          Mr. Cut-Me-Own-Customer's-Throat McBride Dibbler may reach me by carrier fruitbat addressed to Zircephate, Unseen University. Ank Morpork.

        • Re:Huh. (Score:3, Insightful)

          by NatteringNabob ( 829042 )
          Anybody that inherits SCO vs IBM is also going to inherit the IBM counterclaims, and the Lanham Act charges at least look rock solid by now. Judge Kimball has practically announced that SCO had no evidence whatsoever of massive copyright violations when they were making extravagent claims. I believe the word he used was 'astonishing' to describe SCO's lack of evidence. In addition since SCO has already agreed that the GPL is a valid license, and the only authority they have to distribute IBM's JFS, RCU, and

      • Re:Huh. (Score:5, Informative)

        by UID30 ( 176734 ) on Friday February 25, 2005 @03:40PM (#11780557)
        delisting is not quite as it sounds. they would really "move" from Nasdaq SmallCap to OTCBB or Pink Sheets. they would still, however, be a publicly traded company.
        • delisting is not quite as it sounds. [...] they would still, however, be a publicly traded company.

          Yes, sorry. I mis-spoke on that one. But as pointed out here says, if they got de-listed and then subsequently folded, the spectre of this lawsuit doesn't go away.

          Someone can always pick up the pieces and start over again.
        • When it comes down to it, the delisting is almost irrelevant. The stock is held primarily by insiders (executives and the parent company), so it is not really traded on the open market so to speak. Anyone considering buying or selling obviously won't be averse to trading a pink sheet penny stock, since that's pretty much what it already is. So the delisting is merely a formality in SCO's drawn out demise.
        • If the company moves to an OTCBB or pink sheet listing, then some funds may be forced to sell, because the company's stock does not fit the fund's investment profile.

          While that does not make the company or its lawsuit go away, it would likely depress the stock price, so insiders would make less money from their options.

      • Re:Huh. (Score:5, Insightful)

        by LaCosaNostradamus ( 630659 ) <[moc.liam] [ta] [sumadartsoNasoCaL]> on Friday February 25, 2005 @04:48PM (#11781200) Journal
        We may as well just say it:

        SCO's legal battle with IBM/Linux/OSS/whatever is a stock-pumping scam.

        De-listing them will curtail their stock marketability, hence the motivation to continue the legal battle.

        Don't get me wrong. Their executives' stock could still be sold ... but under less advantageous conditions, especially that of liquidity. Also, a de-listing could lead to a devaluation, which would simply further harm the stockholdings of these execs. These two effects may be enough for them to throw in the towel with this bullshit legal battle.

    • Re:Huh. (Score:2)

      by Rei ( 128717 )
      We should be thanking SCO. I'd imagine that this will scare off at least a couple companies planning to bring up Linux-related, plus it's helped establish Linux's legitimacy in a court of law. ;)

      • Re:Huh. (Score:2)

        by Rei ( 128717 )
        Ack... I shuold porfraed. :P

        That should be "Linux-related lawsuits.", not "Linux-related."
    • The will get delisted. They always grant companies these hearings if the company seeks one - and then they almost always delist the company.
      So this was to be expected, but probably won't change the ultimate result (being delisted).
      • Well it kind of depends on what the problem with their 10K filing is that is causing the auditors to balk at signing off on it. If the situation clears up, the auditors sign *and* it gets filed before the hearing then it's all moot and they stay listed. On the otherhand, as of yesterday they are also late in filing their quarterly statement as well, which as far as I am aware does not require signing off by an external auditor.

        Welcome to the Pink Sheets...

        • Very good point. I just assumed the problem was probably something that could not get fixed (like a going concern opinion - that will not change unless SCO gets financing in amounts that no one in their right mind would give them).

          But you are right to point out that they could fix the problem.

          As far as the quarterly statement (which I don't think requires auditor sign off either - but I am not sure) Whatever they don't wnat to disclose in the year-end filing (be it a going concern opinion or whatever)

    • Anyone think its funny, the link below the article says "Add SCOEX to your potfolio"? sounds like a great idea! ;)

    • Re:Huh. (Score:5, Funny)

      by m50d ( 797211 ) on Friday February 25, 2005 @03:48PM (#11780656) Homepage Journal
      You kidding? Just find the +5 insightful comments from the last SCO thread and copy them. Mods can't tell the difference anyway.
      • Not sure we've whipped to death the apparent civil war [sltrib.com] at SCO's parent company the Canopy Group and why exactly they can't file basic paper work on time.

        I'm inclined to guess some of the stock issues that are hanging up their 10K may have involved the executives who were summarily executed at Canopy, and since law suits are flying an no one is taking to anyone it may be impossible to get the information they need for their 10K, and maybe the fired execs at Canopy are exacting a revenge on Canopy and SCO.

        A
    • Regarding the original story:
      Unless you think they can find some crazy reason to sue the Nasdaq for billions over it..."

      Well, they really didn't have a good reason to sue IBM, but they did.

  • On St. Patrick's Day, No Less (Score:5, Funny)

    by ackthpt ( 218170 ) * on Friday February 25, 2005 @03:27PM (#11780389) Homepage Journal
    The hearing is scheduled for March 17, 2005, so they again show us what they are best at: staving off impending doom.

    St. Patrick's Day?!?! Gee, imagine Lucky the Leprechaun as an SCO spokesman: "Always after me impending doom!" At least it gives us another occasion to toast with our pint o' Guinness, Harp, Murphy's or some beer with green food coloring in it (hopefully not Sudan-1 [bbc.co.uk].)

    Unless you think they can find some crazy reason to sue the Nasdaq for billions over it..."

    Maybe NASDAQ is running some of it's systems on Linux and that's SCO's perceieved Ace-Up-The-Sleeve.

    NASDAQ Hearing Committee: "Your company is going down the toilet, you're a parriah and you can't even get your paperwork filed on time"
    Darl: "Avast thar, ye scurvy dogs! We be finding yer exchange has a Linux installation on a server, tucked away inna corner. Renew our listing or we'll sue yer fer IP theft and make ye walk the plank! Arrr!"
    NASDAQ Hearing Committee: "You're also a pretty piss-poor pirate. At least get a parrot."

  • wait a second... (Score:3, Funny)

    by ed.han ( 444783 ) on Friday February 25, 2005 @03:28PM (#11780408) Journal
    "unless you think they can find some crazy reason to sue the nasdaq for billions over it"

    rather than suing IBM for millions for some crazy reason, eh? :>

    ed
    • Unless you think they can find some crazy reason to sue the Nasdaq for billions over it...

      Yes, I do think so. SCO can easily find a crazy reason to sue Nasdaq.

      What I don't think they could find is a sane reason to do so.

  • Victim's Impact Statement (Score:5, Funny)

    by bigtallmofo ( 695287 ) on Friday February 25, 2005 @03:29PM (#11780414)
    Will all of us be permitted to prepare and recite a victim's impact statement during the hearing?

  • Suing NASQAQ? (Score:4, Funny)

    by Aeron65432 ( 805385 ) <agiamba@nOSPAM.gmail.com> on Friday February 25, 2005 @03:29PM (#11780419) Homepage
    Don't even suggest the idea, they might do it.
  • This will give me enough time to send them my registration check!

  • They Could Still be a Thorn (Score:5, Interesting)

    by iammrjvo ( 597745 ) on Friday February 25, 2005 @03:30PM (#11780424) Homepage Journal

    Even if, in a few years, there's nothing left of SCO, all it would take would be a small legal department to continue to make trouble for years to come.

    • You've got it backward (Score:5, Insightful)

      by mcc ( 14761 ) <amcclure@purdue.edu> on Friday February 25, 2005 @04:09PM (#11780865) Homepage
      We want SCO to survive. From SCO's perspective meanwhile it is best to quietly go bankrupt shortly. SCO's case is now entering the area where their lawsuits will soon be over-- but the countersuits against them will just be starting. The longer and more messily these suits can be dragged out, if possible against The Canopy Group in addition to just SCO, the better it will be, since this will generate press about how the company that tried to destroy Linux and its executives are tied up in court and being soundly punished for it.

      SCO needs to be kept alive long enough for them to serve as an example to others...

      • SCO's case is now entering the area where their lawsuits will soon be over-- but the countersuits against them will just be starting.

        It's not SCO that is the problem - it's Darl and his brother pulling a two man con on SCO and the stock market. Darl is funnelling a fortune in legal fees to his own brother, for what appears to be very little in the way of results. Two possiblilities are: that no-one else would touch the case or it was always intended to be a scam to funnel money out - I suspect the latter

    • Sure, why not? The company could collapse, but remain as a corporate shell that it takes peanuts to support, and various execs with remaining stockholdings could pony up yearly fees (again, peanuts when compared to getting a big settlement from IBM, etc.) to have some law firm continue prosecuting the case. With all the millions that SCO execs probably have squirreled away from their immense stock fraud, this could be a thorn indeed.

  • Hedge Funds (Score:5, Interesting)

    by artlu ( 265391 ) <artlu@art[ ]net ['lu.' in gap]> on Friday February 25, 2005 @03:30PM (#11780429) Homepage Journal
    As a hedge fund manager myself, one of our strategies is to target distressed companies in order to turn profits. However, SCO's model of late has been dismal for the product category that they are targetting. For example, a company like Rambus ("RMBS"), which basically makes their money from I.P. regarding memory has staying power as their patents span many products and industries.

    On a side note, my hedge fund does not have the resources of taking over a company, but following Eddie Lambert's role with KMart/Sears it would not surprise me if an independent company would make a requisition bid for SCO.

    Aj
    • But, why would you wish to take over SCO? They are being shown to not have any IP. The product, SCO unix, will be gone from the market place within another 2 years (probably 1 or however long the longest support contract is).
    • The big difference is that Rambus makes money on IP, SCO just wants to. Rambus created and maintained clear title to their innovative IP. SCO basicly inherited old IP already released under a variety of licenses, which they themselves released themselves as GPL. Big difference.

      Kmart and Sears are both strong branded retailers, who have a variety of products, locations and loyal customers. SCO has... well, laywers on contract.

  • Re: (Score:2, Informative)

    by account_deleted ( 4530225 )
    Comment removed based on user account deletion

  • Hang in there (Score:5, Funny)

    by rdavidson3 ( 844790 ) on Friday February 25, 2005 @03:31PM (#11780443)
    We need you. You can't leave us...

    If you do leave, what else would the /. community laugh at
  • On behalf of thousands of SCO employees and stockholders who have invested their time and money in SCO, I'd like to thank Darl McBride for being a complete and utter buffoon. His personal fortune should be stripped away and distributed to all the people he has screwed through this idiotic and pointless crusade.
    • Quite frankly, I think the investors deserve what's coming. Those who invested before the suit should have seen a scam coming and sold. Those who put money into SCO after that deserve to lose their shirts for being moronic enough to ignore the large majority of individuals involved in Linux development in favor of a pack of lawyers whose original plan appears to have been an extortion scam aimed at IBM.

      I have no sympathy for SCO investors. Maybe, if they aren't eating dog food because of their extraordi
      • Well then think about the employees. A company is more than a number on a stock ticker. People who worked for SCO over the years put a lot of commitment and effort into making it as successful as it was. That's been pretty well wiped out now because a handful of people at the top made really, REALLY stupid decisions, trying to pull off their big legal maneuver instead of focusing on things like, ohhh, making and selling better products.

        I also don't think many of the investors can really have been expected
        • Well, I have no sympathy for the investors. There have been plenty of people in some position to know the Linux kernel who have been saying since the very beginning that SCO's claims were crap. Yes, there were some Wallstreet types who claimed SCO had a case, but you know what, I don't ask my barber how to change the oil in my car, and I wouldn't ask an investment advisor about the code in operating systems.

          There's this old rule in science about extraordinary claims requiring extraordinary evidence. A c

    • It's trite but it bears repeating:

      Steal $20 and you go to prison. Steal $20 million and you go to a mansion on a hill.

  • Delisting (Score:5, Insightful)

    by bazmail ( 764941 ) on Friday February 25, 2005 @03:45PM (#11780621)
    Delisting is not the end of a company. It takes the shine off their corporate presence, but little more. The huge crippling lawsuit on the other hand could well be the end for SCO, here's hoping. This is a non-story about a non-company.

    Bring on the litigation.............

    • Re:Delisting (Score:4, Interesting)

      by mcc ( 14761 ) <amcclure@purdue.edu> on Friday February 25, 2005 @04:04PM (#11780817) Homepage
      SCO is entirely a PR construct at this point. They have no notable products or future sources of revenue. Their stock is their sole product. They exist to try to convince enough people that they are too a real company that they can attract investors.

      When your business is PR, a PR defeat is a defeat to your core business. This means that delisting is a much more serious problem for SCO than it would be for a normal company; if you take the shine of SCO's corporate presence away, what is left?

    • Re:Delisting (Score:3, Insightful)

      by michaelas ( 588213 )
      It does more than take the shine off their corporate presence. The major exchanges have stringent filing and reporting requirments. If SCO gets delisted it could have an enormous impact on their stock price since many investors, especially institutional investors will not touch an OTC stock. The negative impact on the stock can have a profound ripple effect on the company. Shareholders or the board can revolt and shake up management. It could even open SCO to a hostile takeover. ...Michael...

  • Obligatory SCO Comment (Score:4, Funny)

    by Cytlid ( 95255 ) on Friday February 25, 2005 @03:47PM (#11780654)
    Everytime there's an SCO story, I feel obligated to comment.

    Hmm.. oral hearing? Will I be able to find pictures of Daryl with the kneepads on, on the web soon?
  • This reminds me of a recent situation I got involved in. The decision was in my favour, but the other party appealed and made the process as long and drawn out as possible.

    And he still lost.

    And he owes interest on the amount.

    Classic. I hope something like that happens to SCO. :)

  • Isn't it amazing.... (Score:5, Interesting)

    by JustNiz ( 692889 ) on Friday February 25, 2005 @03:50PM (#11780675)
    According to this story:
    http://www.theregister.co.uk/2005/02/25/sc o_titani c/

    Sco's total revenues are down 59% and their SCOSource revenues are down a staggering 99%. Sco are badly losing in court and now they are probably going to be delisted.

    Isn't it amazing that Darl McBride gets a salary well in excess of $1m, a bonus of 750,000, plus thousands of shares and options.

    How does Darl get away with it and how can a board of directors that pay him actually be THAT stupid?

    • Re:Isn't it amazing.... (Score:3, Insightful)

      by Kwil ( 53679 )
      Stupid?

      Have you looked at the deals the board is getting?
    • How does Darl get away with it and how can a board of directors that pay him actually be THAT stupid?

      It's like this. The chairman of SCO has enriched himself by many millions of dollars in options and bonuses. Many people think it is likely that the SCOvsIBM lawsuit is part of this enrichment strategy. See Groklaw.

  • SCO is as.... (Score:2, Interesting)

    by KingBahamut ( 615285 )
    nearly stupid as M$ is at times. I seem to remember hearing that Ransom Love had told McBride when he became CEO , that he wasnt aware of the shit he was going to stir up when Darl decided to sue everyone for Billions of Dollars.

    Was this Premonition on Ransom's part?

    possibly, seeing as now Love is a renewed Linux supporter, now (Though at the time he wasnt) Id be interested to hear what He has to say about all of this now that its about run its course.

    Darl on the other hand, probably has the board that

  • Change of ticker symbol (Score:3)

    by Angst Badger ( 8636 ) on Friday February 25, 2005 @04:07PM (#11780843)
    Curious to see what this was doing to their stock price, I discovered that their ticker symbol has changed from SCOX to SCOXE.

    Not knowing terribly much about the stock market, I can't say why this is. Was it imposed by NASDAQ? It seems a rather odd thing to undertake voluntarily under the circumstances. But maybe they did it so panicked investors wouldn't be able to find them in order to sell.

    "SCOX? I'm afraid I can't process your sell order, sir -- there's no such company."

    True enough in the long (or perhaps near) term.
  • Slashdot > ...Unless you think they can find some crazy reason to sue the Nasdaq for billions over it...

    SCOLawy3r > OMFG ROFLMAO WHAT A GR3@T ID3@!!!!!!!!11!!!

    * SCOLawy3r is away: filing lawsuit

  • This may not be a good thing (Score:4, Insightful)

    by spisska ( 796395 ) on Friday February 25, 2005 @04:24PM (#11781000)
    While I don't doubt that Darl & co will be in jail within a couple years, SCO's delisting may not be the good news that it seems.

    Keep in mind that our primary desire should be for SCOs idiotic lawsuits to be resolved with a decision that sticks. If the company simply disappears and the suits are unresolved, it doen't really help Linux because the IP questions in the case would still be open, at least in a narrow, legal sense.

    With IBM's heavy investment into Linux, I have to believe that they want resolution, not simply that the case go away. The question is, can IBM get a decision if SCO goes belly-up before the case ends?

    Obviously, as a company SCO is finished. As a lawsuit with a logo, they have very, very little chance. However, what we need for Linux is a judgement that finally and fatally destroys them.

    Then the real fun starts -- criminal cases. IANAL, but if I were, I would be salivating at the prospect of going after McBride, personally, for everything from wire fraud (he does use the telephone, right?) to petty theft of company pens before all SCOs property is auctioned off.

    As I see it, he will very soon have a great deal more personal attention than he ever wished from the SEC, FBI, IRS, and a lot more folks with blue suits and Federal Government IDs.
    • OR -- IBM could take a page from the RIAA playbook. Buy SCO for pennies in bankrupcy, establish the legal precidents it wants by finishing the SCO-IBM lawsuit, then turn around and have the SCO shell sue the pants off of their current legal team for malpractice. That's what happened to MP3.com.

    • Keep in mind that our primary desire should be for SCOs idiotic lawsuits to be resolved with a decision that sticks.

      It doesn't matter anymore - the only thing that can be proved now is that lying to a judge is bad, and there are plenty of earlier cases of that.

      Their claims no longer matter since they cannot back up any of them with evidence despite having a long time to do so.

      It's never really had anything to do with linux, that was just the bit of misdirection that allowed McBride to funnel all the resour

  • I can't think of a better gift on my birthday than that.

    Ok, I lied. I can think of several, but this one I'll probably actually get!

  • Volume is already down (Score:3, Interesting)

    by Animats ( 122034 ) on Friday February 25, 2005 @04:54PM (#11781292) Homepage
    That "E" suffix on SCOX has already driven their volume way down to about a third of the three-month average. They're now thinly traded.

    And they still haven't filed their 10-K for last year. If it's not filed by the hearing date, they're going to be delisted.

    There just has to be something really, really embarassing in the 10-K. Nobody files a late 10-K because of good news. And remember, since Sarbanes-Oxley became law, Darl has to personally sign the 10-K under penalty of perjury. Hide bad news, go to jail.

  • One would think that the threat of a NASDAQ delisting would send a stock's price down the toilet. Yet SCOX(E)'s price barely noticed it.

    Surely there cannot be an explanation other than a concerted effort by interested parties to keep the price at its current level? Shouldn't someone (SEC?) care?
  • get dumped :)

    Gotta love it.
  • You know there is some SCO techie who is just doing his job because he needs a paycheck (he probably feels unpure about working for sco, but when you gotta feed a family, you gotta do it)... and he is dying to post here but is scared for being rated karma -50 (the mods will make an exception) ;)
    • You know there is some SCO techie who is just doing his job because he needs a paycheck (he probably feels unpure about working for sco, but when you gotta feed a family, you gotta do it)... and he is dying to post here but is scared for being rated karma -50 (the mods will make an exception) ;)

      Tough cookies. I spent all my sympathy during the last election.
  • -You reap what you sow.
    -Karma (nuff said)
    -What goes around comes around.
    -Do unto others as you would have them do unto you.
    -Even the Wiccans have something about this:
    "Eight words the Wiccan Rede fulfill:
    An' it harm none,
    Do what ye will.
    Blessed Be to thee."

    You'd think a Mormon would have heard 3 of the above...
  • I am torn between being gleeful and wanting to buy just one share for the trophy. I am afraid that others will get the idea and the price will rise beyond the point they will be saved from delisting. I want them delisted.

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