SCO Stock Continues Downward Spiral 186
tobiasly writes "TechNewsWorld reports that three and a half years after SCO saw its stock price increase tenfold to US$20.50 following the filing of its lawsuit against IBM, it closed Tuesday at US$2.28 per share, or two cents less than where it was before the lawsuit. This follows a sustained slide fed by poor earnings results and courthouse reversals which, according to OSDL CEO Stuart Cohen, shows that 'Linux and open source software are bigger than any one company. Linux has won in the courts and is winning in the marketplace.'"
so where's the SEC investigation? (Score:5, Interesting)
Where's the SEC investigation of the SCO executives? At this point, there's plenty of evidence that this entire IBM lawsuit was a pump-and-dump scheme. What's the deal?
Re:so where's the SEC investigation? (Score:2)
Re:so where's the SEC investigation? (Score:2)
SCO CEO McBride sold 7000 shares. (Score:5, Informative)
* Robert Bench has three filings: 7000 shares, 5000 shares, and 4100 shares.
* Jeff Hunsaker sold 5000 shares at the beginning of June.
* Darl McBride sold 7000 shares just after the suit was filed.
That's millions of dollars [lwn.net] in stock sales [boosman.com]. Given that the stock price skyrocketed when they announced the lawsuit, and the executive stock dumping began shortly thereafter, what do you make of this situation?
Clearly (Score:5, Funny)
Re:SCO CEO McBride sold 7000 shares. (Score:2)
me, nothing. I already wanted to hang McBride by the balls anyway
Seriously, people placed their money betting on SCO success in harming free software? well too bad for them. They actually helped SCO, so If they lose money I gloat in 32-bit color.
Re:SCO CEO McBride sold 7000 shares. (Score:4, Funny)
That's nothing - look at GTW to see real scam (Score:4, Informative)
CEO, and long time scam artist, Lap Shun Hui has been dumping his free shares by the millions, and not properly reporting his sales. Apparently the guy is above the law.
There has been very little insider selling involved in the scox-scam.
Re:SCO CEO McBride sold 7000 shares. (Score:2)
Re:so where's the SEC investigation? (Score:5, Insightful)
Also, they're quite busy and tend to ignore companies that are either small or dying, on the basis that a dying company is a problem which will resolve itself if ignored, and they have more important things to do.
Re:so where's the SEC investigation? (Score:5, Insightful)
What a poor way for the SEC to handle such situations. The specific problem, if any, is with the management, not the relevant company -- the problem won't correct itself when management join another company after its death, and they may simply repeat the strategy, perhaps more ambitiously, since it paid off the last time... this could just bring down further other companies which were in dire straights before.
The management does their investors an extreme disservice, with their misguided efforts; surely they could come up with a better way of building a profitable business than relying off-chance that they might be able to kill Linux.
Surely a company should not invest its future in the outcome of a single lawsuit, if the evidence in the clear evidence available in their favor is lacking, and the theory of how they are likely to successfully argue their case, and whether the likely recovery of damages will outweigh the risk, are doubtful.
If the management cashed in their millions, perhaps the rest of the time actually pursuing the lawsuit is a thin veil, a farce, specifically and secretly designed to protect the perception of management's legitimacy to regulatory agencies, etc.
The lawsuit and arguments leading up to it may have been a staged thing, but they couldn't back down without admitting either an act of incompetence, OR an act of manipulating the market for SCO stock.
Until such time as the SCO management actually produce a credible case, and good solid evidence to back it up, it would seem they perpetuate a farce.
Re:so where's the SEC investigation? (Score:2, Interesting)
I will bite, where is that evidence then? All I see is people claiming it to be pump and dump.
Selling stock when it is sudden worth ten times as much (who wouldn't?) isn't evidence of pump and dump. Given the context it can of course be suspicious.
If you accuse without any proof, you will just be doing what SCO have done for so long.
Re:so where's the SEC investigation? (Score:2)
Not in and of itself, but when insiders all of a sudden sell a boatload of shares when they'd sold nothing the over the previous year things start looking rather iffy, particularly when the timing of events that led to the stock price increase were directly controllable by management and just happened to coincide with planned sales.
Re:so where's the SEC investigation? (Score:2)
Granted, sudden selling is only dumping if the reason the stock went up was because of "pumping" - personal actions by the seller to deceive buyers, hence raising the price without fundamentally increasing the value of the company. Which is exactly what happened here, don't you agree? Are you saying the burden is on us to prove SCO doesn't have a rock-solid legal case against IBM hidden away somewh
Re:so where's the SEC investigation? (Score:3, Insightful)
I have no idea about this kind of thing. However, it could be argued that should SCO win the lawsuit, then their strategy will have been justified. If you accept that premise, then the SEC is obliged to wait until the case completes. The SEC does not have the right to take actions based on their expected outcome of a lawsuit. To do so would effectively be a summary judgement overriding the courts.
Additionally, even if the lawsuit should fail, it was public knowledge. The SEC might take the position that a
The Govt. Legal Team (Score:2)
Also, only geeks really care about this case, and by and large, they'll be satisfied with a court victory against SCO. Why commit more government funds?
Re:so where's the SEC investigation? (Score:2)
That's not all there will be, of course. Darl and Co. will probably have shareholder lawsuits coming out the ying yang as well, although I've said it before and I'll say it again, every
Hoo-boy! (Score:2)
The end is near... (Score:2, Informative)
A close of $2.28 means the stock has lost about 98% of it's value over the last 7 years.
Re:The end is near... (Score:5, Informative)
Re:The end is near... (Score:2)
A close of $2.28 means the stock has lost about 98% of it's value over the last 7 years.
Sounds like NorTel without the stock split.
But the same applies, you would have been better to buy beer as you get to drink it and the empties are worth more.
Still have a long way to go (Score:3, Informative)
Re:Still have a long way to go (Score:3, Informative)
Re:Still have a long way to go (Score:2)
Re:Still have a long way to go (Score:5, Informative)
Re:Still have a long way to go (Score:2, Informative)
If you see the balance sheet of the SCO, their revenue peaked in 2003, the year it sued IBM and declined afterwards. Also its cash flow stateme
And SCOX had only 1/2 as many shares then (Score:2)
Even with scox at three year lows, the market-cap is up from about $6MM to over $40MM.
Re:Still have a long way to go (Score:2)
The title should read... (Score:2)
Re:The title should read... (Score:3, Informative)
Re:The title should read... (Score:4, Informative)
I misread that... (Score:2, Funny)
bowl circler (Score:3, Interesting)
Bring it on. I think they should rename themselves Icarus Operation
H.
Short that Shit! (Score:2, Funny)
Re:bowl circler (Score:3, Informative)
When would you cover this one? There may be residual value at some point (office space, chairs etc). 20.5->0.25 or so would be my guess of maximal profit.
Book value on SCOX (assets minus liabilities, a measure of how over/undervalued a stock is) is 67 cents per share (adjusted for split) for the quarter ending 4/30/06, or a little over $14 million. It probably won't fall below .67/share.
What I find funny is that according to WSJ, there is one analyst still covering the stock with a buy rating. Howeve
Net Worth (Score:2, Interesting)
Re:Net Worth (Score:2)
I'm surprised a company that has no chance to sell anything ever again (after all who would buy anything from a company that is known to sue its customers) is still worth that much. In fact I'm surprised that SCO has any customers left at all.
And I sincerly hope that all the stock gamblers who bet on this frivilous lawsuit lost a shitload of money.
Re:Net Worth (Score:4, Insightful)
Re:Net Worth (Score:5, Insightful)
The major client my company has which still runs SCO uses it on a server that must be certified by Auditors at enormous cost (It's a bank). The setup they have now has been in place for around 8 years and at the time they got it it cost 1/10 it's closest competitor.
They have bought replacement software + hardware anyway and are now doing internal validation (before sheling out a few million to the Auditors).
Re:Net Worth (Score:3, Informative)
Re:Net Worth (Score:2)
Re:Net Worth (Score:5, Informative)
Re:Net Worth (Score:3, Interesting)
Purchase == liability (Score:5, Informative)
Liquidation is the only solution.
Not Fair (Score:3, Funny)
Re:Not Fair (Score:2)
Yay! (Score:2, Insightful)
(But seriously, as soon as RoyalBank/BayStar Capital pulled out, I think their funding prospects tanked - now they're just a silly waste of money to anyone who does the slightest bit of research before buying. And anyone who doesn't research an investment is risking a complete fleecing anyways, regardless of what company it is
Burn Baby Burn! (Score:2)
Re:Burn Baby Burn! (Score:2)
Re:Burn Baby Burn! (Score:2)
Venture investors (Score:3, Insightful)
Now their ods are waaaay to long for anybody's stomach, and probably the only thing keeping the stock out of the sub $1 market is the many short sellers who still have to cover their positions from time to time. -- I mean, who else in their right mind is going to buy SCO stock these days, other than an insider on orders from 'higher up'?
Re:Venture investors (Score:2)
IBM could just buy them out (Score:2)
Re:IBM could just buy them out (Score:5, Insightful)
Re:IBM could just buy them out (Score:2, Redundant)
Re:IBM could just buy them out (Score:5, Insightful)
Sometimes reputation has to be publically defended.
Of course, there is the alternative theory, IBM lawyers like to play with their lunch before eating it
Re:IBM could just buy them out (Score:5, Insightful)
Plus, thats assuming that they could convince those who hold the levers at SCO to sell up (if the rumors are true and Microsoft etc are the ones who are really behind SCO and the lawsuit, they are going to want to keep fighting to do as much damage to linux as they can)
Re:IBM could just buy them out (Score:2)
If IBM did buy SCO, they could have the pleasure of firing everyone there.
Buying scox == buying lawsuits against you (Score:3, Informative)
These lawsuits are no problem for scox, because scox plans on going bankrupt. But, if IBM bought scox, IBM would inheret all the lawsuits.
Why do you think msft decided to sue by proxie?
Better idea: IBM sues MSFT (Score:2)
Lanham act violation - Scox knowing made verifiably untrue statements to the mass media. For example, scox has many times claimed to own the Unix operating system.
RICO - Scox has claimed that anybody using Linux has to pay scox, or scox will sue them. This is extortion, racketeering, and barratry. Scox even mailed out 1500 threatening letters.
Aside
Good To Know... (Score:2, Funny)
Open Source bigger than Microsoft? Or just SCO? (Score:5, Interesting)
I think the victory is bigger than just the downfall of SCO. This shows that any number of Closed Source companies, working in concert / collusion / tandem... have lost to one single man - Richard Stallman, and his GPL. It is the GPL which has tightened the noose around SCO, completely puncturing the SCO case, since they themselves were offering the 'infringing code' under the GPL. Linux and Linus Torvalds are merely incidental, given the magnitude of the victory we are seeing now... in fact, Linus was hardly involved in the case at all.
This is not just IBM vs SCO. Let's remember even IBM is not entirely behind Open Source, they have patents and interests in the Closed Source arena as well. In the ordinary world, if IBM wins vs SCO, they would control the entire Linux market, but because of the GPL, the entire Open Source community wins! In fact, this squarely places the spotlight on IBM now, specially since Lenovo is pre-loading Linux. Will IBM abandon their entire Closed Source strategy, and become the Google of the Services segment, in a truly Open Source way? Time will tell...
Companies like Microsoft, Apple, Adobe, Sun, Oracle etc. are losing. Try hard they may, but they have failed to negatively affect the marketshare and mindshare of Open Source products and the philosophy behind it. The day is not far off when Apple and MS are quoted below $1. On that day, the victory will be complete.
Re:Open Source bigger than Microsoft? Or just SCO? (Score:5, Insightful)
On an idealistic "free software" note: This is a battle for freedom, not against oppression. The objective is not to kill MS or Apple (that would benefit no-one), it's to get them to accept Free Software, and embrace and produce it themselves. When Free Software surpasses them and if they don't change, they will die, that's just the way it goes. But the idea behind Free Software is not to "kill" anyone, it's just to be better. A genuine victory would be for Free Software to just become "how it's done", and for market leaders to all embrace these techniques.
Victory is Free Software as the norm, not the killing of other companies. That's a hollow goal.
Re:Open Source bigger than Microsoft? Or just SCO? (Score:2)
Hmmm.. very nice point, and very-well articulated as well. Thanks for re-orienting my perspectives a bit.
However, in the interim period before the goal of Free Software norm is achieved, don't you think the battle against oppression is a much more potent and tangible motivating force? Sayings like "The kite rises higher AGAINST the wind" and someth
Re:Open Source bigger than Microsoft? Or just SCO? (Score:2)
I just think it shifts the focus away from the merits of Free Software, and towards the shortfallings of other people. It also characterises Free Software as a fringe element, and a bitter one at that. I just don't think it's a useful goal.
Re:Open Source bigger than Microsoft? Or just SCO? (Score:2)
I think it is important to understand the enormous Money and Muscle power that Closed source giants enjoy. Mere Free Software is useless if the hardware will not tolerate freedom - TiVO devices, and branded PCs from Dell, printers from HP, video cards from NVidia etc. being examples. Or if no one develops on top of Free Software (the Sun Java trap). Unless a few Big Name firms (and their dubious philosophies and business pra
Focus (Score:2)
Towards the MSs, Oracles, etc. Part of what got me interested in linux & FreeBSD was the sneering condescencion of MSs sock-puppets like ZD & CNET. They seemed to suggest that their readership was simply too stupid to use any form of unix. Eventually, I stumbled across a copy of Mandrake 8.2 (at Wal-Mart!) which showed me that I had been lied to. And that's why I no longer have bookmarks for ZD or CNET.
I like
Re:Open Source bigger than Microsoft? Or just SCO? (Score:3, Insightful)
Stallman would not have, nor could have, fought this fight alone.
He is the person responsible for the idea. And it's a good idea.
Re:Open Source bigger than Microsoft? Or just SCO? (Score:2)
So many entities on either side of the Free / Closed philosophy... and that includes Microsoft and Linus Torvalds, have changed their stance / approach / press-releases / licensing models etc. Over the past 15 years and more, Stallman has been expounding his thoughts with consistency and prescience.
Considering he is a mere individual, this indeed seems REMARKABLE and certainly worthy of sainthood.
Re:Open Source bigger than Microsoft? Or just SCO? (Score:3, Insightful)
Yeah, yeah, yeah. And Ben Franklin was solely responsible for the US victories in WWII.
Really, if we have to credit a single person for saving the universe, my nomination would go to PJ over on Groklaw. And I'm sure she'd be the first to say that she couldn't have done it alone.
All credit to Stallman for the GPL, for the foresight he showed, an
Re:Open Source bigger than Microsoft? Or just SCO? (Score:2)
To give you an idea of what you're up against with MSFT, you're looking at a company whose founder - Bill Gates - is worth so much money, he cannot spend all of the interest he makes from it in one day - in fact, I would have to guess that he could sustain the company for
Re:Open Source bigger than Microsoft? Or just SCO? (Score:2)
Seriously you believe this? Really I'm not trolling, I just don't understand why a victory in a lawsuit against IBM (and incidentally, GNU/Linux) signals the end of proprietary software. Just beca
Re:Open Source bigger than Microsoft? Or just SCO? (Score:2)
Dude. You sound like some weird open-source John Galt. "He stepped to the window and pointed to the skyscrapers of the city. He said that we had to extinguish the lights of the world, and when we would see the lights of New York go out, we would know that our job
Re:Open Source bigger than Microsoft? Or just SCO? (Score:2)
Proprietary software is great. It allows companies to hire groups of dedicated engineers to build a product and then fund further development and improvement. It helps meet consumers, and not just developers, needs. It is generally faster and more focused than open source. It gives people control over their creations. Most of all, it provid
Re:Is this overrated? (Score:2)
Time is running out for SCO (Score:5, Informative)
Time is running out for SCO. Check the scheduling order [groklaw.net]. We're past the stalling of pretrial discovery. We're past wondering if SCO has some surprise evidence. Discovery is over. Now things speed up. Expert reports are coming in now and end on September 22. On September 25, summary judgement motions start, and undoubtedly IBM will make some. Things can only get worse for SCO in the summary judgement phase, where some or all of SCO's case may be thrown out and IBM might win on some of their counterclaims. This whole thing could end in September.
If not, trial starts in February 2007.
Can stock prices go negative? (Score:5, Funny)
Re:Can stock prices go negative? (Score:5, Informative)
I suppose, if a company's assets were negative - if the company was in major debt - and there was some way to force the shareholders of the company to pay the owed money, then yes, indeed, the stock could and likely would go negative.
Possibly unfortunately, though, there's no way that can happen - although I personally would be vastly amused if all the SCO stockholders were forced to pay IBM for owning part of such a doomed company, I suppose it would open up an incredible number of legal problems
The last bit is bullshit (Score:3, Interesting)
Linux has won in the courts and is winning in the marketplace.
Linux has not won in the courts. IBM is doing well against SCO - but it isn't over till it's over, and the lawsuit could go on for another year, at least. Trial is currently scheduled for 2007.
Linux is not winning in the marketplace. Microsoft is winning in the marketplace, it has about 10 times as big a market share as Linux, last time I looked.
Don't misunderstand me - I'm a big Linux fan, and I'm posting this from my Debian Etch system, which is connected to the Internet thru my Debian Sarge firewall. But you don't win by deluding yourself that the enemy has lost, when in fact it is very far from losing.
Analyst's comment missing (Score:4, Interesting)
IBM is winning (Score:4, Insightful)
If this was happening to a smaller company, maybe it wouldn't have the funds to defend itself and would be gone bankrupt by now.
The threat is still strong.
SCO could have done well. (Score:3, Insightful)
Re:SCO could have done well. (Score:2, Informative)
Except that The SCO Group (SCOX) isn't that company. It's the company that used to be know as Caldera who bought the UNIX business from OldSCO. F
They did that. (Score:2)
they could have been the major player in Linux for business. They just had really bad, shortsighted leadership.
Their leaders are in Redmond, but don't worry they are on the same ride. The SCO you are talking about did hitch onto free software. M$ crushed them, just like they did Corel.
They won't be able to do that much longer. The performance and cost difference between free and non free software is so extreme that the money is moving. Those that don't move will dry up and die. $6,200,000,000 in
Baseless (Score:2)
The extraordinary amount of communication issued to the press during the anti-Linux SCO case should have alerted a real investor about the nature of these claims. Now, I wonder whether US criminal prosecutors will take th
Who tagged this "haha"? (Score:3, Insightful)
Unless there's an SEC investigation, it doesn't matter that some corporate entity called The SCO Group will go down in flames - the people who caused it all made out like bandits.
Re:Who tagged this "haha"? (Score:2)
If the situation was reversed, they'd be laughing all the way to the bank.
Re:Who tagged this "haha"? (Score:2)
Re:Cohen talks bullshit (Score:3, Interesting)
Neither did SCO as a company - but Darl McBride and his brother who is pulling in HUGE fees on the legal team are doing very well financially out of this. SCO will be sucked dry and Darl will move on to his next victim - with the reputation of being a "hard hitter" that would have won if it wasn't for those pesky kids and their penguin. Expect to see him in the news again later on - and hopefully some jail time if people are paying more attention in a later scam.
Re:Cohen talks bullshit (Score:2)
Re:Cohen talks bullshit (Score:2, Interesting)
This isn't about marketshare. The lawsuit is about one the things that makes Linux the best OS for your computer; it is resilient to attacks trying to take it away from you. SCO's declining stock value is due to public perception that SCO bet the farm on breaking that resilience; and lost.
KFG
Re:Cohen talks bullshit (Score:2)
There are already OSes that have withstood far more vigorous attackthan this one, they are the BSD family. The attack even precipitated Linux adoption !
Re:Another Math-Impaired Reporter (Score:2)
Re:A big company crushing a smaller one... (Score:4, Insightful)
Except that in THIS case it's the smaller company that's been dragging it's feet at EVERY step of the way. So IBM hasn't done "something like this".
Re:A big company crushing a smaller one... (Score:4, Informative)
SCO, stop hitting yourself (Score:2)
You really haven't been paying attention, now have you? It's okay, there are lots of other facets to our world and this too will pass.
A trial date has been set for years. It was originally going to be this Fall, but SCO (IIRC) asked for it to be advanced. They've since suggested they needed another delay, but they were reminded that when the schedule was changed it was not going to be changed again.
Prior art is a patent defense but patents are not part of this litigation -- patent infringements were in IB
Re:A big company crushing a smaller one... (Score:5, Informative)
LOL. That's what you're supposed to do. It's called discovery. You can't file a claim against someone without showing them the evidence you have against them regarding that claim. This enables them to mount a defense. Both SCO and IBM have asked for evidence as part of the discovery process.
On December 12, 2003, SCO was ordered by Judge Wells, "...to identify and state with specificity the source code(s) that SCO is claiming form the basis of their action against IBM". SCO claimed that they couldn't do this without access to IBM's code, and requested the entire source base to both AIX and Dynix including all versions and changes. SCO's motion was granted by Judge wells.
On March 18, 2005, IBM delivered to SCO everything they had requested. The 80 GB of code and a server machine to put it on was was delivered on time. SCO, then claimed that this information wasn't enough.
SCO has been objecting in one way or another to a judge's order for almost three years.
Who is holding up the trial again?
Re:A big company crushing a smaller one... (Score:2)
Re:A big company crushing a smaller one... (Score:2)
Re:A big company crushing a smaller one... (Score:2)
Besides, you're a troll for completely disregarding the morality issues here. If Microsoft was suing Rambus for their shenanigans, or even better, fighting back against a frivilous claim being made, you can bet Slashdotters would be backing Microsoft. A few slashdotters are pie in