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SCO - What have WE Forgotten?

Cliff posted more than 10 years ago | from the daytraders-and-lawyers-live-on-different-planets-than-we-do dept.

Caldera 738

Ed Almos asks: "When trying to examine the SCO affair with a cold analytical eye I can't help but be worried. Over the last twelve months the SCO stock price has climbed from just over a dollar to nearly eighteen dollars and at its peak it was well over twenty dollars. Hindsight is a wonderful thing and if I had invested my life savings in SCO stock last Christmas I would now be a multi-millionaire, examining which speedboat to buy instead of which bills to pay. Even a six month analysis of the stock price shows steady growth from about ten dollars to seventeen, a strange situation for a company which is supposed to be on its last legs. For years I had a friend who worked in the petroleum industry as a deep sea diver. Deep sea diving is one of the most dangerous jobs on the planet and when you looked at Matt's desk the first thing you saw was a wooden sign asking 'what have I forgotten?' When you are three hundred feet down the last thing you want is to find out you have forgotten an important tool, it's bad news all round. Matt lived to a ripe old age so I suspect that the sign worked. We all need to ask the same question about the SCO affair, what have we forgotten?"

"Over the last eight months I have read countless posts on Slashdot regarding SCO and most if not all of the posts view the scene with rose-tinted spectacles. Promises are made that SCO will be buried and that McBride will find himself in prison, yet they are still there and McBride is still in charge. The men and women who play the stock market on a regular basis are no fools and something unknown to Slashdot readers made the SCO stock price rise by 2.4%, on December 26th, over half a days trading. If someone buys a stock they expect the price to rise, so what have WE forgotten that could be good news for SCO investors? The principle of 'many eyes' has been used by the Open Source movement before. Thousands of people examine source code, submit patches, and ensure that we give the best software we can to the community at large. Bugs are announced and fixed within hours and all of us know that this methodology provides a better solution than that offered by closed source products. We now need to apply the same methodology to the SCO problem, all of us need to consider what we know about this sorry affair and how we can legally contribute to the downfall of the SCO Group.

SCO have been ordered to produce their evidence against IBM by midnight on January 11th, 2004. This gives us [five days] to make sure that when the IBM lawyer marches into court he has a spring in his step, knowing that he has every Linux user on the planet behind him. THEN we can talk about SCO being buried, but not before.

Thank you for your time and a Happy New Year."

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darl for president (-1, Offtopic)

Anonymous Coward | more than 10 years ago | (#7893916)

he's more exciting than the current crop of GWB alternatives

Re:darl for president (0)

Anonymous Coward | more than 10 years ago | (#7893945)

SCO. What is it all about... is it good, or is it whack?


Anonymous Coward | more than 10 years ago | (#7894132)

sco licks me (-1, Offtopic)

Anonymous Coward | more than 10 years ago | (#7893917)

and i lick it

This is nothing new (4, Insightful)

koreth (409849) | more than 10 years ago | (#7893923)

It's easy to find things to kick yourself about. If you look at the last year -- or any year -- you can probably find 10 investments that would have made you really wealthy if only you'd known about them ahead of time, all of them shady or of questionable long-term value. That this particular one happens to be in a field that you care about just means you notice it, not that it's unusual.

Trouble is, you can also find 100 investments that looked just like the great bargain-basement opportunities, but went from low-valued to zero-valued during the same year. Nobody knows for sure which ones are which until after the fact. Some people are better at guessing than others; those people go on to be successful mutual fund managers, but even the successful ones get it wrong a lot of the time. They keep making money because they have their funds spread out over a lot of stocks, not because they have crystal balls in their closets.

Here's an interesting fact: Very few stock funds, even the successful ones, outperform market indexes over the long term. Lots of high-profile funds do really well for a year or five but then have a lousy year or two and lose all their gains relative to the market as a whole.

If you want to build wealth trading stock in public companies, history says the most successful strategy is to buy a wide, diverse portfolio. Keep buying into it over time, whether the market is up or down ("dollar cost averaging.") Then ignore the people who happen to get lucky on a particular stock pick -- because you know if you try to do that, you're much more likely to end up broke than rich.

Re:This is nothing new (2, Insightful)

Dutchmaan (442553) | more than 10 years ago | (#7894036)

Yes I frequently lament about almost buying Yahoo when it was at $10 a share before rising to over $400 splitting and then rising to $400 again.. and splitting again.

I actually had the buy screen up with my cursor on the buy button and had second thoughts at the last second...

If by some weird miracle I had actually held the stock that long.. I wouldn't be posting in a slashdot forum from work today.

Re:This is nothing new (2, Informative)

BoomerSooner (308737) | more than 10 years ago | (#7894112)

Good advice. Here's some more. Diversification doesn't only mean a well diversified stock portfolio, it also means bonds, TBills, Mortgage/Real Estate, Tax Free Municipal Bonds, etc. There are a lot of investment opportunities, stocks are very volatile.

Re:This is nothing new (5, Insightful)

tarquin_fim_bim (649994) | more than 10 years ago | (#7894119)

The question is; do you want to feel good about yourself or worship at the alter of Mammon. If the soul purpose of ones life is to die with as much money as possible then perhaps one may regret not buying SCO stock. But consider all the honest companies that may be lacking investment due to this anomaly.

If it's too good to be true... (3, Interesting)

Trolling4Columbine (679367) | more than 10 years ago | (#7894172) always is, when it comes to investments.

Mark my words! After SCO gets slapped around in court, Darl & Co. dumps their shares, SCO's stock price plummets, and stakeholders get all pissed off, this will end up one of the worst (and most publicized) corporate scams in recent memory.


Anonymous Coward | more than 10 years ago | (#7894206)

SCO (5, Funny)

Stargoat (658863) | more than 10 years ago | (#7893928)

If any organization got as much press as the SCO, regardless of whether they did anything or not, they're stock would rise in value.

Besides, the SCO might get somewhere. After all, they've got Sen. Orrin Hatch (R. Utah) looking out after them. He's got to keep his son employed somehow.

Re:SCO (1, Troll)

Stargoat (658863) | more than 10 years ago | (#7893960)

Their, you fool, their!

Re:SCO (2, Insightful)

kiwimate (458274) | more than 10 years ago | (#7893969)

If any organization got as much press as the SCO, regardless of whether they did anything or not, they're stock would rise in value.

Too true! Look what it did for Enron...


Re:SCO (1)

olyar (591892) | more than 10 years ago | (#7894125)

Its not true that press generates stock price. HP got tons of press during the Compaq merger and it drove the price down. Like he said - investors are not stupid.

Re:SCO (0)

Anonymous Coward | more than 10 years ago | (#7894184)

If any organization got as much press as the SCO, regardless of whether they did anything or not, they're stock would rise in value.

Could you explain what you mean by "they are stock would rise in value"? That just doesn't make sense.

You've forgotten... (-1, Offtopic)

Anonymous Coward | more than 10 years ago | (#7893934) pay your $1399 licensing fee you cock-smoking teabaggers.


Re:You've forgotten... (0)

Anonymous Coward | more than 10 years ago | (#7893999)

Oh god, I love when you talk like that. Rub my clammy nipples!

Thats a good job! (0, Offtopic)

AndyFewt (694753) | more than 10 years ago | (#7893937)

"Deep dea diver"

yeh, when I grow up I want to dive into deep dea.

Re:Thats a good job! (0)

Anonymous Coward | more than 10 years ago | (#7894032)

"Deep dea diver"
Crack-head Bob is writing for slashdot now?

Skeletons in the closet (5, Insightful)

mark99 (459508) | more than 10 years ago | (#7893938)

I personally find it hard to believe that there are NO skeletons in the Linux kernel closet. That is perhaps one of the advantages of closed source. Deeper closets...

Re:Skeletons in the closet (1)

captnjameskirk (599714) | more than 10 years ago | (#7894013)

I personally find it hard to believe that there are NO skeletons in the Linux kernel closet.

It is exactly this reasoning that is behind the "surprising" stock value.

Bad analogy (1)

The Ape With No Name (213531) | more than 10 years ago | (#7894060)

You should say "Locked Closets." OSS is at least available to be vetted. If there are skeletons (pardon me while I hum some Anthrax), then they will be found and removed.

Re:Bad analogy (0, Offtopic)

BoomerSooner (308737) | more than 10 years ago | (#7894151)

How the hell do you hum Anthrax? I mean you must smoke 8 packs a day to get that kind of distortion on your hum.

My hat goes off to you, Anthrax hummer.

Re:Skeletons in the closet (4, Insightful)

commodoresloat (172735) | more than 10 years ago | (#7894141)

No; that's an advantage of open source: no closet. If there be skeletons, they be out in the open where they can be discovered by anyone looking for them.

Re:Skeletons in the closet (4, Funny)

Anonymous Coward | more than 10 years ago | (#7894204)

Arr, right ye are, matey.

If it's mod points ye be wantin', I have none.

The way I see it is... (3, Insightful)

Kwikymart (90332) | more than 10 years ago | (#7893954)

that this whole SCO thing is a lot like the .com fiasco. The craze may still be pumping those stocks, but we all know it's eventually going to burst. This is no different.

We have forgotten (4, Interesting)

Rev.LoveJoy (136856) | more than 10 years ago | (#7893956)

... that the SEC takes years to investigate and try pump and dump schemes.

-- Cheers,
-- RLJ

Re:We have forgotten (2, Interesting)

Ralph Wiggam (22354) | more than 10 years ago | (#7894068)

A pump and dump requires a dump. There certainly has not been one in this case.


Re:We have forgotten (0)

Anonymous Coward | more than 10 years ago | (#7894130)

Er, have you completely missed the "insider trading" links on Yahoo and others? There's quite clearly a lot of dumping going on. It's not making the insiders billionaires, but they're definitely leaving with a good chunk of cash. Not to mention what their families may be selling.

Re:We have forgotten (0)

Anonymous Coward | more than 10 years ago | (#7894200)

Wow. Quite the detective. Now check the insider trading on IBM or RedHat.

For this to be illegal, you would need to show some sort of "inside" manipulation of the stock. Which might be happening, but nobody here can trace the breadcrumbs. So, a reasonable expectation is that SCOX has been going up based on very public press releases and the same Linux Hype that catapuled other winners like VA Linux.

Re:We have forgotten (2, Interesting)

BWJones (18351) | more than 10 years ago | (#7894153)

A pump and dump requires a dump. There certainly has not been one in this case.

This most certainly HAS been the case. Examine SEC filings on Yahoo to see which principals of the company have been selling off significant portions of the stock and you will see what I mean.

Re:We have forgotten (4, Informative)

Phaid (938) | more than 10 years ago | (#7894194)

Excuse me? You mean SCO exectutives aren't dumping SCO stock [] ? It's not exactly an underreported story...

Re:We have forgotten (-1, Flamebait)

Anonymous Coward | more than 10 years ago | (#7894077)

What? No they don't. You are talking out of your ass. The SEC is known for moving VERY quickly, moreso than any other government organisation.

Shut up and let the smart people talk.

Re:We have forgotten (1)

Rev.LoveJoy (136856) | more than 10 years ago | (#7894155)

Clearly, you are correct Senior Coward. I bow the floor to you.

-- RLJ

Re:We have forgotten (4, Informative)

Zathrus (232140) | more than 10 years ago | (#7894168)

It's not a bloody pump and dump scheme.

Gods I'm tired of hearing this.

Corporate execs cannot just call their broker and say "buy!" or "sell!" when it comes to companies that they have insider knowledge on. You must file SEC forms months or years in advance, and there are time periods before routine announcements (10Q/10K) where you are prohibited from selling stock. Nobody has accused anyone at SCO of violating these rules. If you can, then go to the SEC.

As for Daryl, he has a mere fraction of his stock options. Go read the contract -- it's spelled out quite clearly in their 10Q/K statements. They didn't make a profit last quarter, so that resets the clock on the 100k (or 150k? I don't recall anymore) options that he would get for 4 profitable quarters. Oh, and even if he was awarded them -- guess what? He still can't sell them for 1-2 years under SEC and SCO regulations. The rest of his shares vest over a 4 year time frame.

If he wants to pump and dump then he's in an awfully bad position to do so -- he'll need to keep it going for 5-6 years in order to sell everything. Even though I expect the lawsuit to take 5+ years, the winds will be blowing for or against SCO well before the end. I still don't get why SCO took this course (other than the obvious cornered rat reason), but it isn't to pump and dump.

On the other hand, there are some very interesting money and stock manipulations happening with Canopy. If you want to look for someone doing questionable things, look there... not at SCO's execs themselves.

you forgot to read groklaw (1, Insightful)

Anonymous Coward | more than 10 years ago | (#7893957)


Invalid Assumption (5, Insightful)

kaffiene (38781) | more than 10 years ago | (#7893958)

You're assuming that stock prices reflect the "value" of a company - they don't. Investors aren't often all that smart and a bit of media buzz is often enough to make them invest. Media buzz != sound financial investment.

The fact that SCO is listing higher is an indictment on the mentality of investors not a reflection of the soundness of their legal case.

Re:Invalid Assumption (1)

Discopete (316823) | more than 10 years ago | (#7894197)

This is too true.

I 'd like to see a break-down of institutional investors (other than the holding company that owns more than 50%) vs. private investors & what the institutional investors are using SCOX for.

Growth, core, etc...

I'm thinking that the majority of them are looking for a quick growth with no long term hold.

POV (5, Insightful)

GnrlFajita (732246) | more than 10 years ago | (#7893959)

Point of view - that is primary thing most people forget when looking at things like that jump in share price. If you are working as a stockbroker, or even just an average joe that dabbles in the market, and you see this tech company (that has been around a while) claiming billions of dollars worth of licensing fees for its intellectual property, don't you think it'd be worth throwing a few dollars at them just in case they're right? Especially considering the magic words: 'intellectual property,' 'licensing fees,' and 'tech.'

It doesn't mean anybody has 'missed' anything, just that the people that invest in SCO are not doing so based on the technical or legal merits of its lawsuit.

Re:POV (1)

fishbowl (7759) | more than 10 years ago | (#7894213)

"...don't you think it'd be worth throwing a few dollars at them just in case they're right? "

In *hindsight*, which is one of the key points in the article, yes.

But, even the uninformed dilettante who invests on a whim does not have to do much research at all before he discovers there is significant contraversy about the SCO deal, and because of that, it should have big red flags saying "RISK" even for the greenest player.

As the OP said, if you'd bought SCO when the story broke, you could be rich now -- and you'd be pulling your money out now which would actually work against the company...

Attention span equals zero. (1, Funny)

conner_bw (120497) | more than 10 years ago | (#7893961)

Sorry but this isn't kur0shin, this is slashdot and no one will read anything that lengthy with antic-dotes siting examples that aren't tech related. Is this the return of Jon Katz posing as a user?

Spelling Natzi alert (0)

Anonymous Coward | more than 10 years ago | (#7894148)

to cite, not to site

ummmm (0)

madpiggy_dj (698126) | more than 10 years ago | (#7893967)

i did'nt understand a word you just said, something about never forgetting?, what is the point in this article, something about the sco case against linux, some piece of evidence we've forgotten???

Re:ummmm (1)

aborchers (471342) | more than 10 years ago | (#7894101)

i did'nt understand a word you just said, something about never forgetting?, what is the point in this article, something about the sco case against linux, some piece of evidence we've forgotten???

Reading this post immediately following this one [] almost split my ribs...

cash (1)

sstory (538486) | more than 10 years ago | (#7893971)

That valuation is probably reflective of the $64 million in cash SCO got from a VC firm. The rest of the valuation doesn't make sense in terms of revenue and outlook, though.

I forgot... (4, Funny)

fataugie (89032) | more than 10 years ago | (#7893974)

to short 1000 shares of SCOX...Thanks for the reminder!

Re:I forgot... (1)

Iaughter (723964) | more than 10 years ago | (#7894093)

Are there any slashdotters that plan on/are selling short SCO stock? I'm not sure that I'm that confident.

Re:I forgot... (1)

fataugie (89032) | more than 10 years ago | (#7894166)

Well, if I hadn't been totally REAMED with the Andover/VA Linux takeover and subsequent CRASH, I'd have a few $$$ to give it a try.

But, I have no one to blame but me...(so this is not a troll or flamebait you moderators)

Re:I forgot... (0)

Anonymous Coward | more than 10 years ago | (#7894156)

I just put in an order at Schwab to short 1,000 shares. Within two minutes they called back telling me they have no shares available to lend.

fp (0)

Anonymous Coward | more than 10 years ago | (#7893976)


Stock investors smart? (3, Insightful)

Telastyn (206146) | more than 10 years ago | (#7893977)

Come now, the stock market is legalized gambling these days. It's a nice easy way to invest in a company. Investments are risks. The stock buyers are taking the risk that SCO is successful. I mean, what if they were? Certainly their stock would be worth probably what? 1000x current with actual Linux licensing fees?

Hell, do you know anyone who wouldn't take 1000 to 1 odds when the American legal system is involved?

P. T. Barnum said a sucker is born every minute (0)

Anonymous Coward | more than 10 years ago | (#7893982)

There are alot of suckers out ther buying SCO stock. Eventually the house of cards will crumble and alot of people will be left losing their life's savings.

A key thing to remember: (5, Insightful)

odano (735445) | more than 10 years ago | (#7893985)

In many cases (especially with tech stocks), stock price has *nothing* to do with how well or badly a company is doing. In fact, if a company gets a lot of press, which SCO has, it often causes a lot of people to buy the stock, which in turn causes the stock price to go up. Was there really any good reason to be investing in the company? Probably not. Another example of an over-inflated tech stock, that will probably crash like so many other have.

Re:A key thing to remember: (More) (1)

chrisreedy (127131) | more than 10 years ago | (#7894159)

Also, SCO is a thinly traded stock with most of the stock held by insiders and institutional investors. As a result, there are not that many shares available for trading by the general public. It is easy for insiders to manipulate the stock prices and any buy or sell of 10,000 or 20,000 shares (not that many in the grand scheme of things) can cause a large swing in the price of the stock.

we have forgotten (1, Interesting)

Anonymous Coward | more than 10 years ago | (#7893991)

That Sco is a for profit company and that the American legal system has little relation to what is right and wrong. If SCO didn't think they could make a profit off suing Linux users they would not. Also as a business they must have some sort of legal argument as I have NEVER seen a business go into a PUBLIC legal battle with nothing but smoke an mirrors.

Beware, sco may yet win!

As usual, we have all forgotten... (2, Funny)

HungWeiLo (250320) | more than 10 years ago | (#7893995)

to check Post Anonymously.

Or the Preview button.

we forgot to feed the troll (-1, Offtopic)

Anonymous Coward | more than 10 years ago | (#7893996)

which makes me particularly happy this article has been posted.

now, any slashdotter who has been sitting quietly on the sidelines, can join the frenzy and spew forth some unsubstantiated speculation, FUD, etc. and generally bash SCO, and ignore the fact that linux might actually have a problem to deal with.

We have forgotten... (3, Insightful)

moehoward (668736) | more than 10 years ago | (#7894000)

We have forgotten to be humble.

We have forgotten not to act like those who we dislike.

We have forgotten to take the high road.

And this includes letters and statement from leaders in the community, as much as ACs on Slashdot.

Re:We have forgotten... (1)

Patrik_AKA_RedX (624423) | more than 10 years ago | (#7894195)

We have forgotten we're all monkeys who fell from the same tree.

Lottery Ticket (5, Interesting)

Raindance (680694) | more than 10 years ago | (#7894018)

First off, wonderful submission. It's well-written, well-meaning, and helpful.

Now, are things different on Wall Street?
I trade stocks for a living. Some of it is daytrading. from the category Cliff chose, 'from the daytraders-and-lawyers-live-on-different-planets-t han-we-do dept.', the implication is that things work differently in the stock market. That's sort of the case, but not entirely.

The key issue here is potential; *if* SCO wins, it'll win $3B plus leverage vs every single linux user (if collectable, $699/installation for single-cpu installations, more for more processors; also $39(?) per embedded device). The payoff is huge and Wall Street functions on potential and leverage.

What does this imply (or explain) about SCOX and said stock price?
I once read an insightful quip in an investment article about SCO; the quip was 'Buying SCOX is like buying a lottery ticket'. Meaning, there's a huge potential payoff but, chances are, you'll get nothing. The SCOX stock price, hence, is an average of the perception of those two extremes.

2 years from now, SCOX will either be worth $100+/share or $0/share.

In conclusion, the rising stock price is a function of Wall Street's perception of the odds of this lottery ticket.


Re:Lottery Ticket (0)

Anonymous Coward | more than 10 years ago | (#7894170)

so, if the share could be $100 in 2 years, and it is currently ~$18 that means the odds are 1-51/2? Not too bad of odds, but I don't think they are that good in reality.

ala inclone, ala allegience (1)

Brigadier (12956) | more than 10 years ago | (#7894179)

keep in mind the technology is the dog, the stock market is the tail. With regards to tech companies at least. If what your saying is right both companies above would be kick of the NASDAQ right now. however the lack of recourses, R&D, bad decisions have cought up with them and what are the stocks worth. Allegience was worth $40 plus not is just below ten cents.

Re:Lottery Ticket (-1, Troll)

Anonymous Coward | more than 10 years ago | (#7894186)

It's well-written, well-meaning, and helpful.

Well-written? Well-meaning? Helpful? Huh?

He rambles a bit about not forgetting important things. Like what? What have we forgotton? Deep sea divers? What?

Its a typical incoherent /. rant that doesnt accomplish anything.

Corrections (5, Informative)

overshoot (39700) | more than 10 years ago | (#7894026)

SCO have been ordered to produce their evidence against IBM by midnight on January 11th, 2004.

Actually, they've been ordered to state their complaints against IBM; evidence comes later.

Also, their deadline isn't midnight the 11th: as with all such legal matters, it's COB (17:00 local) on the deadline or the first Court day (the 12th) following it. The Clerk of the Court's receipt of the response is the magic timestamp, and the Clerk isn't going to wait up to midnight on a Sunday in the hopes that soon Darl will be there.

None of this matters. (2)

mcc (14761) | more than 10 years ago | (#7894029)

Even if SCO pulls out some dramatic legal problem with linux, it can be worked around.

The great thing about the open source movement is its agility under pressure. When there's nothing making it move, its agility-- on things like, say, -- drops to zero, but when things HAVE to happen, they can happen blindingly quick. If SCO does in fact have some real proof of some legal issue hidden somewhere-- unlikely, because if they had it they probably would have played it by now-- I'm convinced the Linux community will find some way to resolve the legal issue and keep going without so much as a hiccup.

If such a thing arises, then is the time to worry about it. Until indications such a thing exists, though, there is nothing that can be done to prepare, so I can't see paying much thought to it.

So all we're we're mostly forgetting here-- though I've heard it on slashdot a lot-- is that SCO doesn't have to win to win. All SCO has to do is drag things out. In the end, SCO will lose the case and fade into bankruptcy.

What we're forgetting is that having lost and faded, the SCO execs will walk away rich from stock sales and laughing. Meanwhile, the over a year of SCO propaganda will have sunk deep into the heads of execs everywhere and will not come out easily, since the kinds of publications executives read will have reprinted SCOs initial, easy-to-grasp-without-thinking allegations vertabrim, but then probably once the truth comes out won't cover it at all since it's much messier and harder to write into a quick dramatic story. This is all we have to be afraid of, I think.

Re:None of this matters. (1)

mcc (14761) | more than 10 years ago | (#7894079)


This doesn't really matter, but:

its agility-- on things like, say, -- drops to zero

I meant to put something there like "making a desktop linux distro where you can easily change the screen resolution from the GUI". I suck at the Preview button.

Stock Market players are no fools??? (1)

tmhsiao (47750) | more than 10 years ago | (#7894033)

The men and women who play the stock market on a regular basis are no fools and something unknown to Slashdot readers made the SCO stock price rise by 2.4%, on December 26th, over half a days trading. If someone buys a stock they expect the price to rise, so what have WE forgotten that could be good news for SCO investors?

Apart from what could be genuine and valid concerns about the SCO case, the meteoric rise of VA Linux stock to approximately 254 points on the day of the IPO clearly shows that the people who play the markets are quite seldom wise.

Donning the tinfoil hat (2, Funny)

allism (457899) | more than 10 years ago | (#7894034)

Are we sure this story isn't an SCO plant to spread FUD?

I have a sign, too (1)

jlowery (47102) | more than 10 years ago | (#7894039)

It's on the bedroom door. It asks "Did you forget your pants?"

So far, so good. Seems to be working.

Two factors (3, Insightful)

bperkins (12056) | more than 10 years ago | (#7894043)

1) Legal wrangling always has some uncertainty involved. If SCO has a 10% chance of winning the case, they get $1 billion. A 2 Billion billion dollar settlment times .1 is 200 Million, which is around their market cap.

2) Let say that investors fall into 2 categories, people of the opinion that SCO will win, and people who are of the opinion that SCO will lose.

The first set buy SCO stock, thinking their investment will pay of 10x. If they're wrong, they'll lose the investment. The second class of investors have to short sell the stock, especially since options don't seem to be available.

The second class of investors have a much worse situation. They can double their money, but if SCO wins, they could lose a great deal of money, in theory there's no limit. What's worse is that if there's a legal victory, the stock is likely to spike, making the possibility of cutting your losses before they get too bad difficult. The current trend is also discouraging. The stock has been slowly gaining value over the months. This would mean a short seller will have to keep pumping money into their initial investment, waiting for the moment when SCO's stock crashes.

If you fall into the second camp, I think the risk is just to vast and the payout too far away for people to jump on.

OTOH, buying puts looks like a much better deal, but they don't seem to be availible.

Not about right or wrong (2, Interesting)

codepunk (167897) | more than 10 years ago | (#7894045)

You state that given a investment in SCO at the right time you would have made alot of money. That leads us to the point that before the rise in price they where a good investment. It has nothing to do with if they are right or wrong. As a investor you would look at the situation and try to estimate how many people are going to buy and how this is going to effect the price. If I buy and everyone else does after me then guess what, I just made a bunch of money. Hell most investors could care less what the companies name even is as long as the deal results in a gain.

Unix Ownership (1)

dtfinch (661405) | more than 10 years ago | (#7894046)

Even if SCO's impossible claims of massive kernel copying prove to be true, they still have to prove that they own sufficient rights to UNIX, which Novell still disputes.

" The men and women who play the stock market" (1)

carlhirsch (87880) | more than 10 years ago | (#7894047)

The men and women who play the stock market on a regular basis are no fools


How am I supposed to take anything else written in this essay seriously?

Buy this stock then (0)

Anonymous Coward | more than 10 years ago | (#7894048)

Sirius (SIRI) - it's nearly doubled in the past couple weeks. Buy SIRI so my shares will continue to go up!

The core of the lawsuit (5, Interesting)

Zathrus (232140) | more than 10 years ago | (#7894051)

Everyone's forgotten what SCO is actually suing IBM for. It's not copyright violation. It's not patent violations. It's a contract violation.

The crux of the matter, as I understand it, is that SCO is claiming that the SystemV contract specifies that they retain control over everything developed for SysV Unix -- regardless of who actually does the development. If you want to kick this back into copyright law (which is likely to become relevant), then they're saying that whatever you made is a derivative work. Even though you may license the SysV code it doesn't mean you can do whatever you want with derivative works.

There's a shitload of smokescreening going on, and SCO has made some really amazingly stupid claims (mostly their execs, not their lawyers, although the lawyers have made some stupid claims as well), but it really does get back to this -- is SCO's read on the contract the proper one? It's not a cut and dried answer. The contracts are very old, have passed through many hands, and have several court cases associated with them. The wording isn't clear either.

Personally, I still think SCO's smoking a big crack rock -- their interpretation of the contract is overly broad and utterly insane. But IANAL.

A coworker (ok... technically my boss) asked me yesterday when I expected the lawsuit to be resolved. I immediately replied 5-10 years.

Anyone who thinks that this is going to be finished before then is smoking one right along with SCO.

Growth (1)

Starve (672909) | more than 10 years ago | (#7894055)

one thing that is to be noted is that no matter how hard open source has been attacked especially *nix in the recent SCO crap, the community I have witnessed has banded together and become a unified place to work, weather or not SCO wins this they will not stop the opensource community, there may come a time when it is frowned upon to use Linux but I know that there will always be people who use it and are proud of it. Raise your fist in the air Opensource, one thing that power to the people also delivers is the ability to speak up and deny those who are doing wrong the ability to do so anymore, this may sound really cheesy but its true people need to be made aware of exactly how great the open source community is and what it has provided and what will happen if one of its keystones is ripped away by a company only out to gain for itself and no one else.

What have you forgotten? (2, Funny)

Sarojin (446404) | more than 10 years ago | (#7894062)

To pay your $699 licensing fees!

SCO Stock price = wishful thinking (1)

rpbird (304450) | more than 10 years ago | (#7894070)

The rise in SCO stocks may a gamble on the part of investors that SCO will be bought out by a larger company. Given the stock price, it may be a good bet. Personally, I'd rather bury my money in the back yard.

Haha... (0, Offtopic)

ryanvm (247662) | more than 10 years ago | (#7894071)

if I had invested my life savings in SCO stock last Christmas I would now be a multi-millionaire

Haha - what a loser. I only missed out on the chance to be a multi-thousandaire.

Not sure (0)

mobby_6kl (668092) | more than 10 years ago | (#7894073)

>...knowing that he has every Linux user on the planet behind him

Not trying to troll, but I think that even if a small % of Windows users would support SCO, it would be still much more ppl than all Linux users combined.

What do you mean they aren't fools? (2, Insightful)

khasim (1285) | more than 10 years ago | (#7894075)

Look at how fast SCO execs (the people with the real knowledge of how good their case is) were DUMPING their stocks.

Lots of people buying stocks are fools. Look at how many of them lost money during the "dot com boom".

Motive for their crime... (1)

pjwalen (546460) | more than 10 years ago | (#7894082)

An increase in stock should show pretty solid motive. The knew accusing IBM and Linux would have this effect. In the world of media any press is good press. SCO was on it's last leg and the officers of the company needed something to seal assets. Many of them have made future sell plans of their stock, and my guess is so they can exit stage right. If everyone on wallstreet is so savvy for this kind of thing, well I will take anyones money for my stock in enron.

Greed (1, Insightful)

SpaceLifeForm (228190) | more than 10 years ago | (#7894083)

Never forget there are many, many rich greedy people out there. And never forget they want to be richer. Toss in an environment that can't control greed, and you have scenarios such as SCO. While I understand your concerns about SCO, you must remember that the greed factor works both ways, and there is always someone else out there trying to prevent an entity such as SCO from acquiring additional wealth/control.

The main problem in the next year is the environment that the SCO/IBM case will play out in. If you're rooting for SCO, vote for Bush.

What if... (3, Interesting)

ihtagik (318795) | more than 10 years ago | (#7894100)

It is not very far-fetched to assume that SCO's tactics have been almost solely targetted at boosting their shareholder value. This year might be different however. If SCO doesn't come up with concrete irrefutable evidence to support their claims they might end up hurting the very shareholders they have been trying to appease.

Unless...they get taken over by some bigger company with an eye on the pie they have baking...

What I'm trying to get at is that with a market capitalization of merely 250 million and with the intellecual property claims they are making they are begging for IBM or (maybe even) Microsoft to buy them out.

Far fetched? Probably. But imagine if the SEC & the European regulators were to allow such a thing to happen?

(just remember where you heard it first)

You have forgotten to short SCO (2, Insightful)

f1ipf10p (676890) | more than 10 years ago | (#7894104)

You can still make money off of SCO's stock price climb if you take a big risk.

Short their stock.

The truth has a way of shaking out, and when the current SCO hype is undone and the price plumets to a fair value, you will cover your short and buy a speedboat or two (I like Donzi).

I do not often short stocks, prefering to avoid the risk, but in this case...

Invest at your own risk.

Pretty simple (1)

0x0d0a (568518) | more than 10 years ago | (#7894114)

It's pretty simple. The value of a stock is not directly tied (well, except perhaps via dividends or a company actually dissolving) to how well a company is doing. The only thing that matters is predicting what other people will do before they do it. In this case, a lot of people bought SCOX. As long as traders manage to divest themselves of SCOX shares before SCOX actually goes under, it doesn't matter whether SCOX is doing poorly as a company.

Folks who sold SCOX short can just wait until SCOX goes under.

While free markets make a lot of sense, capitalism (the investing of funds in companies, at least in its modern form) has too much tendancy to cause splits between the interest of a company and the interest of its management.

Interesting reversal... (1)

Vexler (127353) | more than 10 years ago | (#7894115)

Because, in this situation, it is SCO that is on dangerous grounds (or, to extend the metaphore, "dangerous waters"), not the other way around. We the Open Source community had no intention of doing anybody in - until SCO raised its middle finger and poked IBM in the eye. This really is a question that SCO ought to ask itself (or should have asked itself) before blasting away at Linus & Co.

On the other hand, the OP did raise some interesting points about various signs that suggest that SCO may not be on its way out - yet. In an earlier article from ComputerWeek (already /.'ed today), there were curious figures of SCO's financial performance this past year. It seems to me that, were it not for the $50 million infusion of badly needed cash, SCO would in fact be doing a lot worse in 2003.

(By the way, I hope we are on a general path of righting the wrongs committed by SCO, not squashing it like a bug. Doing so may set precedences that none of us will be prepared to face someday.)

Beg your pardon? (1)

zizzo (86200) | more than 10 years ago | (#7894121)

The men and women who play the stock market on a regular basis are no fools...

Anyone who has been paying attention to the markets for more than 6 months knows the market is full of fools. That's not to say there is nothing to the rise of the stock price but it is quite likely the fools are driving the price up, not the wise investors.

Were I a gambling man, I'd be shorting that stock.

My this is very dramatic ... (1)

Chromodromic (668389) | more than 10 years ago | (#7894122)

What have we ALL FORGOTTEN!!!

Dude, first lax then relax. Remember, SCO is evil, but it is the evil of banality, not some eternal, overreaching darkness, m'kay? The way this post goes you'd think that if Linux fell then the next thing we'd all see is some shot of space with letters fading into the distance:

EPISODE IV: A NEW HOPE --- It is a time of rebellion. The Great Operating System, Linux, fell to the evil machinations of the Dark Lord of the Sys, Lord SCO ...

Misleading investors (2, Interesting)

AndyFewt (694753) | more than 10 years ago | (#7894124)

I think the SCO exec are misleading investors. You can see it with their FUD releases which claim one thing after another. While we see these for their true value, investors might not have the same perspective. They see one company suing another huge company for a lot of cash and is claiming ownership over parts of a widely used kernel/os.

With the lawsuit and the recent injection of venture capital, plus the latest financial reports saying their licensing drive is making money *but* they spent it on lawyers, I think the investors are keeping the stock until after SCO has to show their cards. If you see a stock jump from $1 to $20 at the high and is now at $10 with more news to come, might you not atleast *consider* paying the $10 per share incase they do have a legitimate claim against Linux which then pushes their stock way above $20.

Unfortunately this, to us, looks like a pump and dump (as shown by sco execs) but the SEC probably wont investigate until after the lawsuit is settled/dismissed/whatever and the outcome of it wont be quick. By that time I assume Darl and friends will be long gone to Soviet Russia/Cuba.

Just a thought, oh and IANAI (I am not an investor)

What? (0)

Anonymous Coward | more than 10 years ago | (#7894126)

Natalie Portman.... Yummy... I could wipe mayonaise all over here and eat her like an eggroll...

For all you Canadians out there... (4, Insightful)

earthforce_1 (454968) | more than 10 years ago | (#7894131)

Remember BRE-X? 7. htm

You could have made a mint on it if you bought in at the right time. The stock went into the $200 plus range, then became worthless over a period of a week.

History repeats itself.

Maths and probability. (2, Interesting)

Flat Feet Pete (87786) | more than 10 years ago | (#7894136)

Lets say there's a 2% chance of this whole SCO thing working. This means there's a 98% chance that SCO's worth $0.28, and a 2% chance its worth an obscene amount.

So the valuation should be:

(0.98 x $0.28) + (0.02 x an obscene amount)

which could still be a big number.

And this is *our* job why? (0)

Anonymous Coward | more than 10 years ago | (#7894150)

This gives us [five days] to make sure that when the IBM lawyer marches into court he has a spring in his step,

Isn't have the research before walking into court the job of the IBM lawyers? Why should the IBM lawyers profit from your free research? Is that not the same idea behind the thinking 'Use the GPL so no company can make money off [my] code'?

Market Makers and SCO (0)

Anonymous Coward | more than 10 years ago | (#7894157)

? - Who are the primary market makers in SCO?

a good time to sell short (1)

schatten (163083) | more than 10 years ago | (#7894162)

while the stock ticks up, would this be a good time to sell short over the next several months? say, buy at 16 or 17 and sell short at 8 or 10? not sure how far apart you can spread the selling short, but if it is doomed to fall, so will the stock and this might bring dollars to the table.

Its a speculation 'bubble' (0)

criscooil (653395) | more than 10 years ago | (#7894177)

The investments are not based on anything real. But you're right, if you get in early and cash out before it crashes, you can make a lot of money. The problem os its very difficult to know when the tide will turn. And if you're late you lose.

"Many eyes" (2, Insightful)

tmark (230091) | more than 10 years ago | (#7894196)

You know, after reading this post I was shocked. I don't track SCO at all, and I don't follow the case, but I assumed from all the derisive posts I'd read here that SCO's stock was in the dumper. I wonder if that's revealing.

The parent invokes the "many eyes" image as if that will necessarily mean SCO's downfall. But the parent implicitly acknowledges is that there are ALSO "many eyes" - in the market - actually, make that "many many eyes" that are scrutinizing the case and that seem to be voting that they believe there IS merit to the case.

There's several possibilities here, one is that the smart money's just playing up the price until every-day-joe jumps in and buys, at which point the smart money will dump it. Given the length and depth of SCO's rally, I think this seems unlikely (but I've been wrong many times before).

Another possibility is that maybe - just maybe - the market knows more than Slashdot zealots know - or will let themselves admit. Maybe a lot more companies than we know are paying SCO's licensing fees. IANAL, but maybe their case has much more merit than you would guess from reading /. Just because we want something to be true does not make it so.

A third possibility is that SCO's price rise is just an unhappy coincidence completely unrelated to the legal action. Who knows, maybe the case will fall flat on its face and SCO will go in the crapper as so often predicted here. The market has been wrong many times before.

But one thing is clear, you can't get a good sense of what is going on by reading the opinions of chauvinists - like, say, here or on any of the forums populated by people who've gotten rich or hope to get rich holding SCO.

follow the money (0)

Anonymous Coward | more than 10 years ago | (#7894205)

1) Linux is being attacked by SCO.

2) SCO is funded by purchases and investments
from Microsoft.

3) Microsoft owns John Ashcroft's Department
of Justice and various lobbying groups like
Harris Miller's ITAA.

4) Linux does not have lobbyists in Washington
nor "friends" in the courts.

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