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Caldera

SCO posts Q2 Loss, Gets $11k from Linux 459

Paul Hands sent us linkage to SCOs Q2 Financials. "The highlights are that SCOX only collected $11k (yes, K) for that much-discussed license for EV1 and other Licensees. Cost of that $11k was well over $4M. Overall, revenue was just over $10M, and they made a net loss applicable to common stockholders of $14,959,000, or $1.06 per diluted common share." Update According to the SCO conference call, this isn't accurate.. their Linux extortion income will be listed in the Q3 financials.
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SCO posts Q2 Loss, Gets $11k from Linux

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  • by Simon Brooke ( 45012 ) * <stillyet@googlemail.com> on Thursday June 10, 2004 @01:38PM (#9389486) Homepage Journal
    <quote> a charge of $2,139,000 related to the impairment of goodwill and intangible assets </qoute>
    • by FuzzyDaddy ( 584528 ) on Thursday June 10, 2004 @01:49PM (#9389674) Journal
      They still have $6,767,000 worth of goodwill - I guess they didn't subtract out the badwill.
      • by cynic10508 ( 785816 ) on Thursday June 10, 2004 @02:01PM (#9389881) Journal
        How about a business karma modifier?
      • by AndroidCat ( 229562 ) on Thursday June 10, 2004 @02:37PM (#9390394) Homepage
        They still have $6,767,000 worth of goodwill - I guess they didn't subtract out the badwill.

        Ah, then obviously they're listing the gross goodwill. I doubt they have any net goodwill at all.

      • "Goodwill" (Score:5, Informative)

        by Theatetus ( 521747 ) * on Thursday June 10, 2004 @02:45PM (#9390494) Journal

        Goodwill is a term of art in accounting. There's a brief summary on Wikipedia [wikipedia.org]. Essentially, "goodwill" is the magic dark matter of accounting that is used to explain whither otherwise inexplicable money goes and whence it comes. For instance, say one of your company's buildings appraised for $1 million but somebody else bought it for $2 million. That goes down as $1 million of "goodwill" so that the numbers balance out. Conversely, if someone else's building appraised for $2 million but he sold it to you for $1 million, that's another example of $1 million of goodwill on your books.

        Hint relevant to this situation: it applies to securities as well.

        • Re:"Goodwill" (Score:4, Informative)

          by Anonymous Coward on Thursday June 10, 2004 @03:04PM (#9390725)
          Heh, no. What you describe is profit. Goodwill is always immaterial, it's the reputation of the company and its products, value of its trademarks, such things, expressed in money.

          E.g. if you spend $1m on advertising and your reputation goes high (your company has higher value), you estimate how higher the value is and account: $1m off your bank account (assets) to advertising (expenses), the value increase (say $2m) to goodwill (assets) and some revenue account.

          However, what SCO did is quite opposite, they had to lower the goodwill and increase their expenses by the same value. This is done when your real reputation goes so low that it's evident it does not have the same value as in accounting.

          This is good, because managers can perhaps better understand what is going on when they see SCO lowering their goodwill.

          (Sorry for my english, some of the terms may not be right but the main idea is.)
          • Re:"Goodwill" (Score:5, Informative)

            by cweditor ( 779169 ) on Thursday June 10, 2004 @03:34PM (#9391094) Homepage
            The charge is for "the impairment of goodwill and intangibles." This is a specific accounting situation covering the decline in value of an intangible asset such as a corporate brand, see the Financial Accounting Standards Board statement 142 [fasb.org] or the March 2002 CPA Journal [nysscpa.org].
          • Re:"Goodwill" (Score:5, Insightful)

            by Otter ( 3800 ) on Thursday June 10, 2004 @03:56PM (#9391346) Journal
            E.g. if you spend $1m on advertising and your reputation goes high (your company has higher value), you estimate how higher the value is and account: $1m off your bank account (assets) to advertising (expenses), the value increase (say $2m) to goodwill (assets) and some revenue account.

            I'm no accountant [slashdot.org], so take all this with a grain of salt, but -- in the US, advertising costs must be expensed, not capitalized. (International practice is definitely different regarding capitalization of research, for example, and advertising may be similar where you are.)

            You're both kind of right, but his explanation that goodwill accounts for the difference between acquisition cost and fair value is much closer to the definition under US GAAP than your model of companies continuously changing their balance sheets to reflect their popularity. Again, internationally YMMV.

            (So no -- it's not like SCO's accountants said "We suck, everyone hates us, revise the books!")

    • by joeldg ( 518249 ) on Thursday June 10, 2004 @01:51PM (#9389710) Homepage
      and if they keep heading down down down the DOW tube, they just might be de-listed by the end of the year :)

      Would that not be perfect.

      • Thanks! (Score:5, Funny)

        by Rei ( 128717 ) on Thursday June 10, 2004 @02:07PM (#9389961) Homepage
        I'd just like to give a big Thank-You to SCO for scaring the bejesus out of any other company who might try this line of attack again, and for helping keep Linux in the news.

        ** Thank You, SCO!!! **

        Linux users in the future will be able to take pride in your accomplishments in making businesses lose their fear of some company trying to do what you did and costing them money, while at the same time pushing awareness of Linux as a real alternative to proprietary products and companies which pursue legal whims like this.
        • Re:Thanks! (Score:5, Insightful)

          by DrEldarion ( 114072 ) on Thursday June 10, 2004 @02:15PM (#9390077)
          helping keep Linux in the news.

          Maybe, but it hasn't exactly been positive news. People who didn't know much about Linux and heard about this whole SCO debacle are probably even LESS likely to want to switch over now.

          Obviously, anyone who has had the situation explained to them (and actually understands the explanation) will think differently, but the average Joe User will see the uncertain history/future as another reason not to switch over. "Why should I switch if sometime in the future I may have to pay $600 because it turns out that someone owns it?!"
          • Re:Thanks! (Score:4, Insightful)

            by blueZhift ( 652272 ) on Thursday June 10, 2004 @02:43PM (#9390481) Homepage Journal
            Well the average Joe User wasn't likely to switch before the SCO debacle anyway. Joe just uses whatever came on the PC. But now it is more likely that in the future Joe will use the Linux that comes on his WalMart PC along with OpenOffice and Firefox or Opera. Why more likely? Only because many basic apps have good viable free alternatives to MS apps. Joe user just wants to do what he wants to do, so if a box with Linux is say $100 cheaper and does what he wants, then he'll probably buy it. The only thing holding him back in the past may have been gaming, but heck, Joe probably does all of his gaming on a console now anyway because they are cheap and easy to use.

            So Joe's heard of Linux now, but that doesn't matter. The important guy is Corporate Mike who's trying to cut costs and increase reliability. That's the guy MS is worried about keeping.

      • Already delisted? (Score:3, Interesting)

        by TWX ( 665546 )
        I thought that they were already delisted, and only noticeable through a specific lookup.

        They're not in the newspaper stocks listings...
      • There was talk a year ago about SCO hoping to be bought out by IBM as a result of the suit...

        Wouldn't it be awesome if, once this company is reduced to ashes, IBM were to buy them out for only a million or two (chump change for IBM). They would finally own ALL of the rights to Unix. Then, they could open-source the whole thing! THAT would be cool!
        • Not so fast... (Score:5, Interesting)

          by dcavanaugh ( 248349 ) on Thursday June 10, 2004 @04:02PM (#9391411) Homepage
          Most of the rights to SYSV belong to Novell, not SCO. From a Linux point of view, nobody has shown any infringing code, but some variants of Unix really ARE based on SYSV and the ownership of code might matter. I doubt that even Novell can actually prove ownership of everything in SYSV or clearly define their rights in a way that would hold up in court. Therefore they collect revenue in some areas where their rights are not disputed, using SCO as a sort of collection agent.

          There is a theory out there stating that Sun's attempt to open source Solaris is just a ruse, so as to pump up whatever is left of SCO's credibility.

          Sun: "We are going to GPL Solaris".
          SCO: "No you can't, we own Unix and the license you bought from us does not allow you to GPL Solaris".
          Sun: "Oh, that's right. You own Unix, and that's why we paid for a license. Silly us."

          If IBM somehow becomes the owner of SCO's IP (whatever that may prove to be), they could possibly remove the SCO "obstacle" to Solaris/GPL and therefore call Sun's bluff. In that case, Sun would just make some other excuse for declining to GPL Solaris (probably blaming Novell). It would be fun to watch, but not quite so much fun as seeing the "For Sale or Lease" sign at SCO headquarters or Darl's resume on monster.com.
    • by CrazyLion ( 424 ) on Thursday June 10, 2004 @02:21PM (#9390178)
      Just to clarify. Goodwill in this case is an accounting concept referring to accounting treatments of premium paid in a merger. Until fairly recently Goodwill used to be amortized (i.e. company would write it off over time). Under new rules, it's carried indefinitely and assessed for impariment. According to SCO's March '04 10-Q, most of their goodwill comes from acquisition of Vultus, Inc. Not very much related to the loss of face in the Linux debucle.
    • by rewt66 ( 738525 ) on Thursday June 10, 2004 @04:23PM (#9391677)
      The "loss of goodwill" means that a company they bought didn't do as well as they thought it would, as others have pointed out here. But near the bottom of this story on Groklaw [groklaw.net], somebody anonymous points out the real dirt. The company that didn't do so well was Vultus. SCO bought Vultus from Canopy, which is the private outfit that owns almost half of SCO.

      This sure smells like the minority owners (Canopy) are bleeding cash out of a publicly-traded company (SCO) by selling it a loser.

      Canopy has done stuff like this before. When one of their companies goes bankrupt, they (Canopy) wind up with the assets that matter, whether or not the company was publicly traded. They do this by making sure that the company that is going under owes Canopy money, so that Canopy is a creditor at bankruptcy time.

      In other words:
      1. Create a private company (company A).
      2. Take company A public. Company A now has lots of money.
      3. Create another private company (company B).
      4. Sell company B to company A.
      5. Profit!

      But wait, there's more...

      6. Make sure company A owes you money.
      7. Let company A go bankrupt.
      8. Using the assets that you get back from the bankruptcy, go to step 1!

  • by i_want_you_to_throw_ ( 559379 ) * on Thursday June 10, 2004 @01:39PM (#9389500) Journal
    Yosemite Darl is the meanest, toughest, rootin-est,tootin-est cowboy there ever was [photobucket.com] and you should be ashamed of yourself for rustlin' away his code, pardner. Why its getting so a man can't earn a dishonest livin no more. [wiseacre-gardens.com]

    Now let's all sing with Darl (while reading the SCO finances) ... "I can't get a long little dogey, I can't even get one that's small, I can't get a long little dogey, I can't get a dogey at all". (Profuse apologies to Yosemite Sam)
  • by Mz6 ( 741941 ) * on Thursday June 10, 2004 @01:39PM (#9389502) Journal
    After reading CNET's version of this story [com.com] (which also gives a good summary on what SCO is doing). SCO's forecast for next quarter doesn't really improve on last ones. The article states that this quarter (ending 31 July) SCO only expects revenue to fall between $10-12 million. But my favorite part of the article was this nice little blurb at the very bottom.

    "The company also announced on Thursday that it had notified the Berlin-Bremen, Stuttgart and Frankfurt Freiverkehr stock exchanges that its ticker symbol had been listed without the company's permission. SCO is asking the exchanges to remove the symbol."

    What's next? CNET gets a "Cease & Desist" letter from SCO because the company's name was used in this story?

    • What's next? CNET gets a "Cease & Desist" letter from SCO because the company's name was used in this story? Most likely. And anyone here who comments on the story. And our families, ex-girlfriends, people with the same last names....
    • by garcia ( 6573 ) * on Thursday June 10, 2004 @01:43PM (#9389557)
      What's next? CNET gets a "Cease & Desist" letter from SCO because the company's name was used in this story?

      Nah, Slashdot is next because their users are expressing negative opinions that haven't been proven in court and they are the reason for the decline of SCOX stock.
    • by SLot ( 82781 ) on Thursday June 10, 2004 @01:45PM (#9389617) Homepage Journal
      The listing appears to be part of an effort by domestic and foreign brokers to circumvent recent National Association of Securities Dealers (NASD) and U.S. Securities and Exchange Commission (SEC) restrictions against so called "naked short selling." Naked short selling involves groups of people working together to manipulate the market by selling fictitious shares of stock in an effort to force a company's share price to go down. Not that I care.

      By listing the Company's common stock on the Exchange, market manipulators sought to benefit from an "arbitrage" loophole that none of the present regulations was designed to close.
      • OMG! (Score:5, Funny)

        by Royster ( 16042 ) on Thursday June 10, 2004 @02:26PM (#9390254) Homepage
        DOn't tell me that *foreign brokers* are evading SEC rules *which don't apply to them* by *trading in their own countries*! What fiends!

        Now, if we can only link them to terrorists, we can torture them.
      • by dekeji ( 784080 ) on Thursday June 10, 2004 @02:31PM (#9390318)
        Naked short selling involves groups of people working together to manipulate the market by selling fictitious shares of stock in an effort to force a company's share price to go down. Not that I care.

        As far as I can tell, naked short selling just means that you make a short sale but don't have the securities to back it up.

        Market manipulation means that you deliberately try to affect the value of a price through your actions. Even if they are harmful to SCO's stock, I don't see why naked short sales of SCO necessarily represent an attempt to manipulate the market. In the case of SCO, it may just mean that people believe they know that it will go down further because of SCO's business practices (I sure am) and want to profit from their knowledge, but that they can't make a short sale any other way.
    • by pegr ( 46683 ) * on Thursday June 10, 2004 @01:48PM (#9389658) Homepage Journal
      Cnet snippet: "As customers go from Unix to Linux, Cornett said, SCO's business is falling off at twice the pace of other software, like Novell's NetWare, a Unix derivative."

      Holy crap! NetWare is a UNIX derivative! Now there's one outta left field! ;)
    • by bstadil ( 7110 ) on Thursday June 10, 2004 @02:19PM (#9390137) Homepage
      As usual Darl et al didn't do their homework. From Korh over at SCOX Yahoo site

      " it turns out that EVERY SINGLE company listed on NASDAQ is traded on the 'unofficial regulated market' at Berlin-Bremen.

      Note that Darl, during the call, said that these were "unregulated" markets, which is clearly not the case."

      "About Berlin-Bremen Stock Exchange: Like all other German exchanges the Berlin-Bremen Stock Exchange is separated in three market segments: Official Market; Regulated Market and Unofficial Regulated Market. Special significance is attributed to the Unofficial Regulated Market at the Berlin-Bremen Stock Exchange. With more than 8,000 national and international companies admitted the Unofficial Regulated Market unparalleled -- both in terms of size and diversity. .. All companies listed on the NASDAQ, NYSE, and several OTCBB companies are listed on the Unofficial Regulated Market of the Berlin-Bremen Stock Exchange, giving investors the largest choice of American stocks in Europe."

    • by Tackhead ( 54550 ) on Thursday June 10, 2004 @03:02PM (#9390704)
      > > "The company also announced on Thursday that it had notified the Berlin-Bremen, Stuttgart and Frankfurt Freiverkehr stock exchanges that its ticker symbol had been listed without the company's permission. SCO is asking the exchanges to remove the symbol."
      >
      > What's next? CNET gets a "Cease & Desist" letter from SCO because the company's name was used in this story?

      Actually, there's something more ornery going on than that.

      A lot of US companies are popping up on German exchanges without the companies' knowledge or consent. It's a cheezy hack to get around US securities laws. Google for "naked short selling german exchange".

      When you sell shares short, your broker is supposed to lend those shares to you so that you can sell them. (When you cover the short, you buy the shares on the open market and hand them back over to your broker). To sell a stock short without borrowing shares is called "naked short selling", and has been against NASDAQ regs for a while. As of April, more regulations went into effect in to prevent the practice.

      The underlying principle is that you can't sell what doesn't exist. That's why your broker has to have some of those shares kicking around and be willing to loan them to you. If you can sell shares that don't exist, you can use that capability to manipulate the market in either direction.

      Although I think SCO (the company) isn't worth a load of foetid dingo's kidneys, I wouldn't want to have a position in SCOX (the stock) either way - and that goes double given the ludicrously small float and high potential for manipulation.

      But for once -- probably for the first and last time in their corporate history -- the litigious bastards who make up SCO are actually doing the right thing when they ask these exchanges to delist them.

  • by jeffbruce ( 166203 ) on Thursday June 10, 2004 @01:39PM (#9389504)
    It should not take too many more quarters like this to put an end to this nonsense.
    • Now we just need to make sure the public remembers who bankrolled this affair.....
    • It should not take too many more quarters like this to put an end to this nonsense.

      That's probably true.

      Of course, then you have another problem. Who's going to wind up with the Unix IP rights after SCO's demise?

      Depending on how their assets are liquidated, someone even worse than Darl and Co. could get hold of them.

      Be careful what you wish for, you just might get it.
  • Watch... (Score:5, Funny)

    by JoeLinux ( 20366 ) <.joelinux. .at. .gmail.com.> on Thursday June 10, 2004 @01:41PM (#9389528) Homepage
    Darl's going to turn around and claim that this is proof that the Linux Business models don't work.
  • by bl4nk ( 607569 ) on Thursday June 10, 2004 @01:41PM (#9389535)
    SCOwned.
  • by kpansky ( 577361 ) on Thursday June 10, 2004 @01:42PM (#9389536)
    If SCO is having Q2 losses, maybe they should upgrade to Quake 3, or at least get a new videocard.
  • SCO dead pool (Score:3, Interesting)

    by nate1138 ( 325593 ) on Thursday June 10, 2004 @01:42PM (#9389555)
    Time to start up the SCO dead pool. What date do you predict that they will run out of money and implode?

  • by Pahalial ( 580781 ) on Thursday June 10, 2004 @01:43PM (#9389559)
    "Expenses associated with our SCOsource division are anticipated to continue at approximately the current level as we continue to protect our UNIX intellectual property and aggressively pursue our legal claims through the court system."

    Ohhhh boy. Better get comfortable people, there's going to be yet more SCO stories for a while.
  • article. (Score:5, Informative)

    by abscondment ( 672321 ) on Thursday June 10, 2004 @01:43PM (#9389562) Homepage
  • by bpland ( 529369 ) on Thursday June 10, 2004 @01:43PM (#9389573)
    I know i'm enjoying watching this all end.

    From SCO Keeps SinkingThu Motley Fool [yahoo.com]
    "Management blamed the slow sales on a "lack of SCOsource licensing revenue." SCOsource is the Linux users' shakedown program. Apparently, no one is paying up. It took in $11,000 last quarter. That's not a typo. President and CEO Darl McBride paid more lip service to "increasing shareholder value," but you really have to wonder about the viability of his vision when his firm's most engrossing initiative brings in less money than the guys who mow lawns in my neighborhood."

    rofl :)

  • I mean, this post might be modded funny, but I swear, I didn't make it up. It's right out of the article.

    "Our revenue for the second quarter was consistent with our expectation and we also incurred significant expenses for the impairment of goodwill and intangibles and for the exchange of our Series A-1 Convertible Preferred Stock. Both of these charges negatively impacted our second quarter results," said Darl McBride, President and CEO. "As the company looks forward to the last two quarters of fiscal year 2004 we are committed to increasing shareholder value through profitable operations and increasing cash flow from our UNIX division as well as remaining focused on our intellectual property lawsuits and licensing strategies."

    Sometimes you don't even have to try to make a funny post, because the dialogue you'd put in Darl's mouth is actually less funny than his own idiotic ramblings.
  • My favorite quote (Score:5, Insightful)

    by Anonymous Coward on Thursday June 10, 2004 @01:45PM (#9389615)
    From a similar article [yahoo.com]

    "A legal victory looks highly unlikely, and even if a decision went SCO's way, the probable remedy would not be money for SCO, but a rewrite for Linux, something the open-source community would accomplish in the blink of an eye."
    • by zurab ( 188064 ) on Thursday June 10, 2004 @02:26PM (#9390255)
      One more quote:

      At 5 bucks a share, with almost nothing available to short, SCO isn't worth much of your investing effort. But it's definitely worth watching, if only as an example of the way a company can be run into the ground, taking investors along.

      I guess they stopped short of recommending /. as your technology investment resource.
  • ...at this rate, they won't have any quarters left for the slot machines.
  • 15 copies (Score:5, Funny)

    by JohnGrahamCumming ( 684871 ) * <slashdot@[ ].org ['jgc' in gap]> on Thursday June 10, 2004 @01:45PM (#9389622) Homepage Journal
    Wow, at $699 a go, they managed to license 15 copies!

    Go SCO!

    John.
  • by Ars-Fartsica ( 166957 ) on Thursday June 10, 2004 @01:46PM (#9389637)
    Since it has become clear that SCO is unwilling to ratify its claims in a court of law (if it were so willing it would be in court already, not seekign further delays), I don't think anyone really believes the threats have teeth anymore.

    In any case the ploy was a success - the goal was never to increase SCO revenue, but to bolster the stock price so execs could sell. The issue now is whether this will be investigated as a pump-and-dump scam that Darl and co knew from the outset had no basis in law. Don't scoff Darl - you still may end up in the cell block with Worldcom and Enron execs.

  • Shocked! (Score:5, Funny)

    by Marc Desrochers ( 606563 ) on Thursday June 10, 2004 @01:47PM (#9389653)
    I wonder what all the people who believed in their Linux licensing plan are thinking right now.

    Maybe we should ask him...

    Bill, what do you think?

  • Weird... (Score:5, Funny)

    by GillBates0 ( 664202 ) on Thursday June 10, 2004 @01:48PM (#9389664) Homepage Journal
    I don't see the expense figures for crack/weed listed there. Maybe it's included under "Amortization of intangibles " or "Operating expenses".

    Hope Darryl clarified on this during their 11am EDT conference today.

    • I don't see the expense figures for crack/weed listed there

      That would be this bit:
      "we also incurred significant expenses for the impairment of goodwill and intangibles"
      We're talking about some serious impairment going on here -- over a million pounds worth of impairment, in fact -- and it's had a seriously negative impact on their goodwill with everyone except their drug dealer.
  • by Anonymous Coward on Thursday June 10, 2004 @01:49PM (#9389673)
    During the conference call earlier in the day, SCO stated that the EV1 revenue was not included in this quarter, and will start showing up in Q3.
  • It is a shame... (Score:3, Interesting)

    by mikael ( 484 ) on Thursday June 10, 2004 @01:50PM (#9389688)
    If they had done something positive, like using their expertise in UNIX internals to offer device driver development for third party hardware, rather than destructive legal disputes, they would probably have made a much better profit.
  • The Motley Fool (Score:5, Interesting)

    by Jaywalk ( 94910 ) on Thursday June 10, 2004 @01:50PM (#9389690) Homepage
    The Motley Fool published a good article [yahoo.com] about SCO's latest quarterly results. They've been increasingly dubious about SCO's claims and this article has pretty much crossed the line to outright contempt for SCO's activities. Choice quotes include calling SCO "something of a laughingstock" and referring to SCOSource as "the Linux users' shakedown program." They have a few things to say about Darl's skills as CEO too.

    Remember, these aren't techies talking about the technical merits of the case. These are financial guys commenting about SCO's quality as an investment. It nice to see someone other than technical folk scoffing at this sideshow.

    • Thanks for the pointer to the article. My fave quote:

      At 5 bucks a share, with almost nothing available to short, SCO isn't worth much of your investing effort. But it's definitely worth watching, if only as an example of the way a company can be run into the ground, taking investors along.

      Ouch. Not even recommended for a short-sell anymore. Nothing left but cash-burn.

      Remember to turn out the lights on your way out. Leave the keys at the night desk.

    • Even more than that (Score:3, Interesting)

      by doublem ( 118724 )
      These are fiancial guys Joe Sixpack listens to. Mainstream all the way baby.
  • EV1 revenue (Score:4, Interesting)

    by Col. Klink (retired) ( 11632 ) on Thursday June 10, 2004 @01:54PM (#9389759)
    From the conference call, it seems that the EV1 revenue won't start coming in until Q3. They still say it's in the "6 figures," but less than $250K and will be spread over several quarters.
  • Not nearly enough (Score:3, Interesting)

    by iamacat ( 583406 ) on Thursday June 10, 2004 @01:55PM (#9389763)
    What is needed is either a lengthy prison term for Darl and a dozen other people at the helm, or an apology for unfair punishment to all the virus writers and pirates, to speak nothing of simple curious, computer-literate individuals. Recently, US justice system claimed worms cause billions of dollars in financial damage and a single song on Kazaa is worth tens of K. Well, they should really jump on this one - a rogue causing countless companies to waste money on laywers or pay for unwanted MS software.
  • Err... (Score:5, Funny)

    by Greyfox ( 87712 ) on Thursday June 10, 2004 @01:55PM (#9389765) Homepage Journal
    They do understand that you're supposed to make money right? That's when the number at the bottom of your balance sheet has a plus sign in front of it.

    I think they'd be better off if they fired all their lawyers and put the rest of their money into lotto tickets.

  • by kb8rln ( 235567 ) on Thursday June 10, 2004 @01:55PM (#9389766) Homepage Journal

    Ok here is the Bittorrent of the SCO Conference Call today in mp3 format.

    http://sco.penguinman.com [penguinman.com]
  • Litigation? (Score:5, Interesting)

    by Claire-plus-plus ( 786407 ) on Thursday June 10, 2004 @01:55PM (#9389777) Journal
    I seem to remember once reading that a few yeard ago Darl was the CEO of a company that sued IBM over intellectual property rights. The article stated that on that occasion IBM bought out the company and Darl received a big payout from the shareholders.

    Some people say that SCO are only attacking IBM this time in an attempt to be bought out. In fact I just found this, an open statement by Darl that he would welcome IBM buying SCO to make the problem go away: SCO's CEO says buyout could end Linux fight [computerworld.com]. I think that settles it. SCO doesn't want to win in court they don't even want to go to court, they just want to scare IBM into buying them out.
  • by Animats ( 122034 ) on Thursday June 10, 2004 @01:55PM (#9389782) Homepage
    In response to the earnings report, the stock has dropped 9% today.

    The stock has been around $5 ± 0.50 for weeks. You can't short a NASDAQ listed stock when the price is below $5, so the bears drop out at that point. Trading volume has been down for weeks. SCO's concern with being listed on some additional exchanges may be that they have different rules on short positions, allowing shorting at lower price points.

    The full numbers from this quarter aren't out yet, so it's hard to figure out when they run out of cash. It looks like they have three to six quarters of cash left at their current burn rate, but that's a rough estimate. Unless they get new financing, it looks like they won't make it to the IBM trial date in 2005.

    At this point, the remaining stockholders who think SCO has a case against IBM might well ask why SCO wants additional delay. SCO can't afford much more delay.

  • From the... (Score:5, Funny)

    by bloggins02 ( 468782 ) on Thursday June 10, 2004 @01:56PM (#9389796)
    "You-can't-make-this-stuff-up dept."

    This is SCO we're talking about, they can make anything up!
  • by Simon Carr ( 1788 ) <slashdot.org@simoncarr.com> on Thursday June 10, 2004 @01:56PM (#9389804) Homepage
    October 2003, stock hovers at a high of $22.

    Now, stock is at $4 and from the looks of things could easily drop back down to $2.

    Hype over. The put up or shut up phase where people assumed they had a case is over. They must have known there was a point where the stock price couldn't be inflated any more by innuendo and "maybe sorta" proof, so I'm wondering why they'd continue down this path?
  • by joeldg ( 518249 ) on Thursday June 10, 2004 @02:00PM (#9389860) Homepage
    Here is a link [techtarget.com] that made me laugh..

    This morning, however, McBride had to face the music with shareholders during the Unix vendor's quarterly earnings call, where he reported sharply reduced earnings and sparse revenue from its licensing business.

    McBride put the blame squarely on his rivals for raising doubts in the minds of potential licensees about the legitimacy of SCO's ownership of System V Unix. SCO alleges that IBM illegally contributed Unix code to the Linux kernel and has levied a $5 billion suit against Big Blue.
  • by rice_burners_suck ( 243660 ) on Thursday June 10, 2004 @02:03PM (#9389900)
    The highlights are that SCOX only collected $11k (yes, K) for that much-discussed license for EV1 and other Licensees.

    I am very happy to read that SCO has made such a large net loss. This is not because support for Linux as much as it is because I do not support the type of business practice employed by SCO.

    I strongly believe that companies have a duty not only to their owners, but also to their customers, suppliers, and even to their competitors. The last one, the duty to competitors, is a duty to compete based on a better products and services, better marketing, better pricing, a better overall customer experience, etc.

    I think that, while litigation is sometimes necessary, most issues can be settled outside of the court system in a mutually beneficial way, or at least in a way that minimizes the damages to all parties involved. Further, litigation and other legal actions (lobbying for legislation, etc.) should not be employed as a source of profit for a company, but only to solve legitimate problems.

    In the case of SCO, I think they have thrown all good business practices out the window, while embracing litigation as a potential source of profit. Essentially, instead of elevating themselves by making sound decisions and consistently improving themselves, they are trying to become elevated by pushing others down. Kind of like the "everything is relative" argument - if you push someone down, then you could say that you have elevated yourself even though you stayed in the same place. This is what SCO is trying to do, and it is not beneficial to anybody except, if they manage to pull it off, themselves. This is a very egoistic and self centered company with no desire to make anything of value. And companies like this should not be supported.

    For those reasons, I am glad that SCO had these losses, and I hope that investors pull their investments, new investors don't buy SCO stock, and potential customers go elsewhere. This evil company should not be supported by anybody.

    Not to mention that I strongly believe that there is no legal issue of any SCO code being copied into other software. In fact, I believe quite the opposite: Either:

    1. No code was ever stolen from SCO.
    2. Or, SCO plagiarized (for lack of a better term) source code from other sources, and later, upon finding identical code elsewhere, either believe that the theft happened in the other direction, or don't believe it themselves but hope to convince others so that they may profit from it.
  • Wrong Link (Score:3, Funny)

    by krgallagher ( 743575 ) on Thursday June 10, 2004 @02:08PM (#9389979) Homepage
    Darn! I was hoping the the URL pointed to the litigious bastards [sco.com]' own web site. That way when the /. effect hit, they could accuse us Linux freaks of another DOS attack.
  • by wandazulu ( 265281 ) on Thursday June 10, 2004 @02:20PM (#9390153)
    As much as I have enjoyed watching this slow-motion train wreck, I am starting to wonder what will happen to the actual Unix rights SCO has, presuming that they will need to sell everything at some point to pay off their creditors.

    Though I have to imagine the government couldn't *possibly* agree to this, can you imagine them selling the rights to Microsoft? Because of all the insanity this company has been willing to wallow in, I can't, for one, imagine them selling the rights to some benevolant organization; I'd think they'd rather do something to screw Linux over "just one more time".
  • by lcsjk ( 143581 ) on Thursday June 10, 2004 @02:26PM (#9390246)
    Now I know there are a lot of /. readers out there like me who hit the link every time there is a new SCO story. But it seems SCO is going under and we will be left with only M$ to bash. Of course M$ has a lot of lousy security and other problems, but they just keep on going and doing their thing like they don't care if we complain or not. Day by day there is nothing new; just new versions of viruses, worms and back doors. They are underhanded and quiet and like to do things like third party funding of SCO.

    SCO is not like m$. Every few days they have a new exciting story' some believable and some not, but what will we do when they're gone? I shudder at losing my sole internet entertainment and so far, you readers have been very stingy with your money. SCO has come up with a lot of ideas for emergency funding, but none seem to be working well.

    What can we do? Well, I have a plan. It's called "SOSco" for "Save our SCO". Shortly, I will be starting up a small company to help provide "stay alive" funding for SCO, at least until their court case. Except for my salaries and actual overhead expenses, the remainder will all go to SCO. With nearly 100,000, /. readers and just a few dollars each (we will accept non USA currency also) I think we can keep things going for one or two more years. That's a small price for this kind of entertainment. Oh, I forgot! I will have to put aside enough funds for a good lawyer team just in case someone tries to sue us for using SOS (since it may have other meaning)and most likely from SCO themselves for using a derivitive of their name without their permission. Be watching daily, because this will be an exclusive story on /. as my company will depend on you readers for it's major funding.

    Thanks,from the team as SOSco

    lcsjk

  • by alficles ( 781213 ) on Thursday June 10, 2004 @02:27PM (#9390271)
    Actually, IBM may be able to Pierce the Corporate Veil [firstam.com] and go after Darl himself. While they may or may not be able to put him in jail, they can sue him for way more than he owns (which is much more than he is worth). In order to go after Darl, IBM would have to prove three things: (quoted from linked article)
    According to the court, the instrumentality rule requires proof of three elements:
    1. complete domination and control of both the entity's policy and business practices;
    2. use of such control to commit fraud or wrong, breach of a legal duty, or a dishonest or unjust act (such as using such control to avoid personal liability previously assumed by an individual); and
    3. that the aforesaid control and breach of duty must proximately cause the injury or loss.
    IMO, the Nazgul should have no trouble with showing these in a countersuit. Darl is not going to be out of hot water any time soon.
  • corporate america (Score:5, Insightful)

    by mabu ( 178417 ) on Thursday June 10, 2004 @02:28PM (#9390279)
    All the while this CEO got paid a huge salary:

    Management blamed the slow sales on a "lack of SCOsource licensing revenue." SCOsource is the Linux users' shakedown program. Apparently, no one is paying up. It took in $11,000 last quarter. That's not a typo. President and CEO Darl McBride paid more lip service to "increasing shareholder value," but you really have to wonder about the viability of his vision when his firm's most engrossing initiative brings in less money than the guys who mow lawns in my neighborhood. By the way, McBride was paid more than $1 million last year -- most of it in cash -- to preside over this impending disaster.

    It really is sickening. And there seems to be no hope in sight for regulatory reform in this area, when public companies can perform goofy shit like this with impunity.
  • Why R&D? (Score:3, Insightful)

    by rumblin'rabbit ( 711865 ) on Thursday June 10, 2004 @02:33PM (#9390341) Journal
    I don't get it. SCO spent over 2 million on R&D last quarter. Why? Their "conventional" business is dead in the water. Consider that (1) they've pissed off huge numbers of IT managers with their IP claims against Linux, (2) they are in a highly volatile situation and may not be around long, and (3) they have developed a delightful habit of harassing and suing their own customers. One would have to be an idiot to initiate business with SCO.

    It's rumoured that BlueStar made the same point to SCO. I think they were right. SCO's conventional business should be in "harvest" mode right now.

    Does anyone know of a reason that SCO should be investing money in R&D?

  • BAH HAH HAH HAH (Score:4, Informative)

    by GoatEnigma ( 586728 ) on Thursday June 10, 2004 @02:50PM (#9390572) Homepage
    Share Statistics
    Shares Outstanding: 14.42M
    Float: 7.80M
    Shares Short (as of 10-May-04): 4.62M
    Short % of Float (as of 10-May-04): 59.27%
    Shares Short (prior month): 3.95M

    Bwa hah hah! What a ridiculously mismanaged company.

  • by HighOrbit ( 631451 ) on Thursday June 10, 2004 @03:10PM (#9390801)
    Apparently BayStar wanted SCO to get out of the Unix business and into the lawsuit business. But what if they did the opposite? What if they stopped forking money over to lawyers and concentrated on developing and selling Unix? They still had 10M in revenue from this quarter. They only spent 1.9M to make that revenue plus another 2.8M in R&D. That's a potential operating profit of 5.3M. There are many small businesses that would be glad to make 5.3M every quarter. The IP-licensing side of their business with all their lawsuits cost SCO 4.4M (see the line about Cost of SCOsource licensing revenue) and only paid back 11K. I think you can see where the money is hemorrhaging.

    I was never a SCO Unix user, but I understand it was (at one time) a repectable unix back in the day and I don't see why it can't be again with a quarterly R&D bugdet of 2.8M. If I was a serious shareholder (not a speculator) interested in growing the business, I would want to know why they don't stop wasting money on this longshot lawsuit crapshoot and start concentrating on what they themselves describe as their "core" business.
  • by shanen ( 462549 ) on Thursday June 10, 2004 @09:54PM (#9394139) Homepage Journal
    http://uk.finance.yahoo.com/q?s=SCOX&d=c&k=c1&c=IB M&a=v&p=s&t=1y&l=off&z=m&q =l

    Right now it shows they've lost about 50% of their value relative to IBM over the last year. It also shows how volatile the SCO price is relative to IBM's stability. Since the lawsuit started more than a year ago, the one-year view doesn't really capture the entire story, and on the two-year view (one click away) you can see that SCO still has to fall some more to get all the way back to where they were before they started this circus. But only a little more. They're almost there.

    Current price is $4.89, but I think they may get into the three dollar range next week.

    A lot of this discussion involved the value of goodwill, but SCO should be more concerned about the Goodwill store. They'll need to buy "new" shirts after losing the ones they have now.

"You're a creature of the night, Michael. Wait'll Mom hears about this." -- from the movie "The Lost Boys"

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