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Business Week: MS Did Ask BayStar If They'd Like to Invest in SCO
Wednesday, March 10 2004 @ 09:16 PM EST

Today, Business Week has confirmed that Microsoft indeed did call BayStar to ask if they'd invest in SCO. It wasn't Bill Gates personally, but did you think it would be or needed to be? Here's the scoop:

"BW Online has learned that Microsoft (MSFT ) did not put up the money, but did play matchmaker for SCO Group (SCOX ) and BayStar Capital, a San Francisco hedge fund which made a $50 million investment in SCO last October.

"Lawrence Goldfarb, managing partner of BayStar, says that senior executives at the software giant had telephoned him about two months before the investment. Would he be interested in investing in SCO, they asked? Goldfarb wouldn't identify the executives, but says neither Chairman William Gates nor CEO Steve Ballmer were among them. He says Microsoft didn't put any money into BayStar or the SCO investment. A Microsoft spokesman says that the company has no 'direct or indirect' financial relations with BayStar, but declined to comment when asked whether execs called BayStar to suggest investing in SCO."

So, that's that. Except there will be more digging, much more.

Here's a story on another area of competition between Microsoft and Linux:

"Microsoft and Linux are competing on more and more levels these days. A report by IHL Consulting Group released this week shows that Windows 2000/XP point-of-sale (a.k.a., POS, i.e., cash registers) systems saw an increase of 13% in 2003, and Microsoft now controls 70% of the POS market. However, shipments of Linux-based systems saw an increase of 19%, showing that Linux is starting to get a stronger foothold in that industry, too.

"IHL stated that the main reasons given by companies for not moving to Linux-based systems were lack of driver support and the seemingly interminable issues with SCO."

More on BayStar and S2 Strategic Consulting on Newsforge. And now SCO announces a stock buyback.


  


Business Week: MS Did Ask BayStar If They'd Like to Invest in SCO | 399 comments | Create New Account
Comments belong to whoever posts them. Please notify us of inappropriate comments.
Updates and URLs Here
Authored by: PJ on Wednesday, March 10 2004 @ 09:38 PM EST
Please put updates and news here. Thanks.

[ Reply to This | # ]

So who's this a job for?
Authored by: atul on Wednesday, March 10 2004 @ 09:45 PM EST
Is this a job for the SEC, or Judge Kollar-Kotelly, or both, or someone else?

Also, the EU's antitrust action against MSFT is still pending, isn't it? Is it
still possible to amend the complaint to add the SCO/Baystar escapades?

[ Reply to This | # ]

Business Week: MS Did Ask BayStar If They'd Like to Invest in SCO
Authored by: Anonymous on Wednesday, March 10 2004 @ 09:46 PM EST
Now, I'd like to know what you can say on the
phone to Baystar that convinces them to shell
out 50 million ...

[ Reply to This | # ]

One question I have about this
Authored by: Anonymous on Wednesday, March 10 2004 @ 09:48 PM EST
One thing that is bugging me is all this info (Anderer email leak, BayStar
comments) about the MS connection to the investment, is coming from SCO and
their associates, and also coincides with a considerable drop in SCOX's stock
price.

What bugs me, is I don't find the rest of SCOX's statements to be especially
honest (e.g. Blake Stowell in Salt Lake Tribune yesterday vs today).

So what I am unclear on is whether we have evidence that

(a) There is a MS connection to the investment

or

(b) SCO wants us to believe there is an MS connection to the investment.


While I don't want to sound like too much of a tinfoil hat, I am bugged by
scenario (b).


The thing that I keep noting, is whenever MS name comes up, SCO/BayStar are not
trying to hide it -- but instead adding fuel to the fire ("Yes the memo was
genuine", and "Yes MS told us to invest in SCO")

What worries me is that (b) would dovetail nicely with SCO's interests. Instead
of a laughable over-litigious company with a collapsing stock price, they
instead look like they are backed by a much more powerful company with plenty of
cash. It might be useful to them in drumming up settlements. It also might be
useful to them in avoiding or diverting some of the blame for their antics.

So, the question is do we know which of (a) or (b) is true? Is there evidence on
this point?

[ Reply to This | # ]

Business Week: MS Did Ask BayStar If They'd Like to Invest in SCO
Authored by: Ruidh on Wednesday, March 10 2004 @ 09:49 PM EST
So I wonder how happy Baystar is with Microsoft right about now.

There's got to be a lot more to it than this. No sophisticated investor dumps
$50M into a small cap company like SCOX without some guarantees or other
opportunities to offset the risk.

They aren't called "Hedge Funds" for nothing.

[ Reply to This | # ]

Business Week: MS Conspiracy in restraint of trade
Authored by: superluser on Wednesday, March 10 2004 @ 09:52 PM EST
Woah. This is like a smoking gun, except with more smoke.
It might not have been illegal for SCO to accept the investment, but it surely
would be illegal for them to ask Microsoft for it, since that would be a
conspiracy that would have the effect of limiting competition. Linux is the
main opposition to Microsoft's OS, and if SCO is colluding with MS, it would
surely be antitrust fodder for Kollar-Kennedy.

On the other hand, even if Microsoft simply encouraged Baystar to invest in SCO,
it would be an action that would limit competition, and likely fall into
antitrust waters, too.

Not a good day for SCO (last checked, SCOX was below $10).

Oh, am I still first (non-PJ) post?

[ Reply to This | # ]

MS Did Ask BayStar If They'd Like to Invest in SCO - This reeks.
Authored by: garbage on Wednesday, March 10 2004 @ 09:52 PM EST
The stench of fish is overpowering.
As usual we have did through all the BS to get to the
truth.

Shame on them all!

[ Reply to This | # ]

Lots of connections going on
Authored by: Nick on Wednesday, March 10 2004 @ 09:54 PM EST
We still do not have all the facts, that's for sure. But the emerging
picture is one of one big extended family helping each other out. We have
Canopy getting licenses for SCO in a settlement with CA. We have S2
connected to SCO via Anderer and McBride's connected past. We have
BayStar, among whose investors is Microsoft co-founder Paul Allen, being
called by Microsoft and being pointed in SCO's direction.

In other words, we may not have fire yet, but there sure is a lot of smoke
blowing around here. It will be interesting to see all the connections made
when the whole story eventually comes out.

[ Reply to This | # ]

BStock Butyback ---- Prce support?
Authored by: Anonymous on Wednesday, March 10 2004 @ 09:54 PM EST
The SCO Group Announces Stock Buyback Program Wednesday March 10, 9:44 pm ET

LINDON, Utah, March 10 /PRNewswire-FirstCall/ -- The SCO Group, Inc., (Nasdaq: SCOX - News) the owner of the UNIX® operating system and a leading provider of UNIX-based solutions, today announced that the company's board of directors has authorized management, in its discretion, to purchase up to 1.5 million shares of SCO's common stock over the next 24 months. The repurchase program is effective immediately. SCO has approximately 14.4 million shares of common stock issued and outstanding. Any repurchased shares will be held as treasury stock and will be available for general corporate purposes.

The repurchase program will allow SCO to repurchase its shares from time to time in accordance with the requirements of the Securities and Exchange Commission on the open market, in block trades and in privately negotiated transactions, depending on market conditions and other factors.

"This action reflects our strong belief in the fundamental value of our intellectual property and core business," said Ralph Yarro, chairman of the board, The SCO Group. "At current prices, we believe our stock represents an attractive investment opportunity and that this action reflects our ongoing commitment to improving long term stockholder value. We believe we will have sufficient capital resources to undertake this buyback program and continue to pursue our strategic initiatives."

Interesting timing.

[ Reply to This | # ]

Business Week: MS Did Ask BayStar If They'd Like to Invest in SCO
Authored by: lpbbear on Wednesday, March 10 2004 @ 09:54 PM EST
Heres hoping Mr. Goldfarb gets asked under oath in several
courtrooms and trials exactly which "senior executives" at
Microsoft asked him if he would "be interested in
investing in SCO". After the "who" part is figured out
lets hope those shy little Microsoft "executives" get the
same kind of grilling in several courtrooms and trials.
And if its not hoping for too much lets see to it that
NONE of the testimony is hidden away from the public by
Microsoft's ever industrious
legal whor... er team.

[ Reply to This | # ]

Business Week: MS Did Ask BayStar If They'd Like to Invest in SCO
Authored by: Anonymous on Wednesday, March 10 2004 @ 09:55 PM EST
Question...

Did buying EV1 and CA buying licences from SCO violate the GPL for EV1 and CA?
It seems to me they may have violated the 4th clause and now they might not be
able to use GPL software.

Your thoughts?

[ Reply to This | # ]

Another SCO / S2 connection
Authored by: atul on Wednesday, March 10 2004 @ 09:55 PM EST
(posted this as a comment to the last story but it got lost among all the other
stuff. It's not so OT with this story, either.)

S2, as you may remember, is Mike Anderer's company, the people who matched SCO
up with BayStar & MSFT. Since the infamous memo came out, SCO's been saying
that he was some random outside consultant who was deeply misinformed. We
already knew that was bogus since Darl and Anderer go way back, but here's more
evidence that the two companies have been working together very closely for a
while now, even outside of the whole SCO vs. Linux thing.

One of S2's subsidiaries is a company called Sans Locus, a web design outfit in
Charleston, SC. Just came across a personal page of someone who's a SCO employee
but who works out of the Sans Locus (=S2) office there in Charleston,
and works closely with the employees of Sans Locus.

http://www.kmcmurray.biz.sco.com

Arms-length relationship, my foot...


[ Reply to This | # ]

OT - Here's a hoot! SCO announces a stock buy-back!
Authored by: Anonymous on Wednesday, March 10 2004 @ 09:57 PM EST
LINDON, Utah, March 10 /PRNewswire-FirstCall/ -- The SCO Group, Inc., (Nasdaq:
SCOX - News) the owner of the UNIX® operating system and a leading provider of
UNIX-based solutions, today announced that the company's board of directors has
authorized management, in its discretion, to purchase up to 1.5 million shares
of SCO's common stock over the next 24 months. The repurchase program is
effective immediately. SCO has approximately 14.4 million shares of common stock
issued and outstanding. Any repurchased shares will be held as treasury stock
and will be available for general corporate purposes.

The repurchase program will allow SCO to repurchase its shares from time to time
in accordance with the requirements of the Securities and Exchange Commission on
the open market, in block trades and in privately negotiated transactions,
depending on market conditions and other factors.

"This action reflects our strong belief in the fundamental value of our
intellectual property and core business," said Ralph Yarro, chairman of the
board, The SCO Group. "At current prices, we believe our stock represents
an attractive investment opportunity and that this action reflects our ongoing
commitment to improving long term stockholder value. We believe we will have
sufficient capital resources to undertake this buyback program and continue to
pursue our strategic initiatives."

[ Reply to This | # ]

Business Week: MS Did Ask BayStar If They'd Like to Invest in SCO
Authored by: lpbbear on Wednesday, March 10 2004 @ 10:11 PM EST
I just wanted to add a little something that I noticed in
this article.

"Lawrence Goldfarb, managing partner of BayStar, says that
senior executives at the software giant had telephoned him
about two months before the investment. Would he be
interested in investing in SCO, they asked? Goldfarb
wouldn't identify the executives, but says neither
Chairman William Gates nor CEO Steve Ballmer were among
them."

Note the emphasis on "neither Chairman William Gates nor
CEO Steve Ballmer were among them.".
Could it be that someone(s) at Microsoft is getting setup
to "take one for the team" and maybe give a bit of wiggle
room for Dr. Frankenstein and his creation? (Bill and
Steve, think of Young Frankenstein and you will see the
resemblance)
Just some thoughts.

[ Reply to This | # ]

Business Week: MS Did Ask BayStar If They'd Like to Invest in SCO
Authored by: webster on Wednesday, March 10 2004 @ 10:23 PM EST
We need a MS timeline.



---
webster

[ Reply to This | # ]

Someone wake up Noorda!
Authored by: Anonymous on Wednesday, March 10 2004 @ 10:40 PM EST
Hey! Where is Ray Noorda! Hey! Nudge nudge! Ralph Yarro is out there making
a big horse's ass out of himself and taking your money! Hellooooooo! Ray!

[ Reply to This | # ]

POS related information
Authored by: Anonymous on Wednesday, March 10 2004 @ 10:43 PM EST
I've been working in the Point of Sale industry for many years. Here's some
interesting facts for everyone to chew on:

The article stated that both Windows and Linux saw increases in use in the Point
of Sale business. However, that is because, until recently, the bulk of POS
systems/cash registers ran one of several possible options:

---
DOS - The venerable favorite of the POS industry. Reliable and well-known.
Used across all industries.

OS/2 - Not nearly as popular as it used to be, OS/2 combined stability with
newer graphical interfaces. Most popular in retail sales.

4680/4690 OS - A favorite in the supermarket industry, it is a long-term and
reliable system. Generally proprietary to IBM equipment.

UNIX - Used by a variety of hotel chains as well as other customers.

Other proprietary systems - Other companies (e.g. NCR, Panasonic and Sharp) run
other proprietary OSes on generally proprietary hardware. Most popular in the
food service industries, but has some presence in retail (especially NCR) and
hotel industries.
---

In reality, Windows AND Linux are relatively recent entrants into the POS
industry, and therefore any gains would likely hit both OSes.

Just FYI!

Brian

[ Reply to This | # ]

Pirates and the treasure.
Authored by: Stumbles on Wednesday, March 10 2004 @ 10:44 PM EST
"says that senior executives at the software giant "

Well, BillyG may not have been directly involved, he is however captain of his ship (feeling nautical). Captains are as a normal course of their position, held responsible for their officers.

When I hear the term senior executives I do not think of some low level manager in the shipping department picking up the phone and having chat with a financing company about where they should place their money.

Senior executives are just that, they are close to the top dog and they genreally work in concert with the Captain being aware of their activies. I would find it rather surprising the Captain not knowing one of his officers just went out on their own (without some kind of approval) to rustle up some dollars for another company.

I realize such an activity between two compaies may not be an unusal event. It does seem more than odd to me a monoply that has described Linux as a cancer helping out another company who's intent is to IMO literally steal other peoples code.

While this particular money trail may have a short path, there are others that may not.

[ Reply to This | # ]

Royal Bank of Canada
Authored by: Anonymous on Wednesday, March 10 2004 @ 10:48 PM EST
Everyone seems to keep forgetting RBC. After all, they
kicked in $30 million out of the $50 million. Does
Microsoft's denial of financial involvement include the whole
$50 million or just Baystar's $20 million. If it wasn't
Microsoft money behind RBC, whose is it and did Microsoft
also "suggest" they invest?

[ Reply to This | # ]

Is SCO totally driven by PR
Authored by: Anonymous on Wednesday, March 10 2004 @ 11:16 PM EST
Look at this page now. We're supposed to believe the stock buy back program has
nothing to do with a new story appearing 1 hour before that SCOX stock is
crashing?

http://news.google.com/news?q=SCO&hl=en&lr=&ie=UTF-8&sa=G&ed
ition=us&scoring=d. The first 3 results are:

The SCO Group Announces Stock Buyback Program
PRNewswire (press release) - 1 hour ago
LINDON, Utah, March 10 /PRNewswire-FirstCall/ -- The SCO Group, Inc., (Nasdaq:
SCOX)
the owner of the UNIX(R) operating system and a leading provider of UNIX ...

The SCO Group Announces Stock Buyback Program
Yahoo News (press release) - 1 hour ago
LINDON, Utah, March 10 /PRNewswire-FirstCall/ -- The SCO Group, Inc., (Nasdaq:
SCOX
- News) the owner of the UNIX® operating system and a leading provider of ...


SCO shares keep on sliding
The Register, UK - 2 hours ago
Cash Register While The SCO Group heats up it licensing attacks, investors
continue to dump shares of the company at an astonishing rate. ...


[ Reply to This | # ]

MS, the army, and MSNBC
Authored by: MarkusQ on Wednesday, March 10 2004 @ 11:23 PM EST

I was amused by MSNBC.COM's headline for this story (and I quote--or rather cut-and-paste):

Army to Microsoft: Halt the free software
...which could be read as the army asking Microsoft to please do something to stop the spread of F/OSS. Of course, as soon as I read the first few lines of the story I realized what was actually up.

My first reaction was amazement that the editors didn't choose a better headline--and then I remembered what the "MS" in MSNBC stands for and all was clear.

-- MarkusQ

[ Reply to This | # ]

The little website that could
Authored by: Anonymous on Wednesday, March 10 2004 @ 11:55 PM EST
Everyday, the SCO story gets a little more torrid. At first, it was just the
hardcore OpenSource fans (like me) that were interested in what the hell was
*really* going on with the fiaSCO. We all sort of suspected that M$ was
involved here somehow, but with no way to prove it of course. Now important
people are starting to 'fess up and spill the beans. This is only going to get
uglier fast.

Mostly because of the work of PJ and groklaw.net, this story is getting more and
more mainstream coverage. This is a front page story on the online edition of
BusinessWeek. I'm fully expecting that this story will be the next 'Martha
Stewart' and be front page news every day for quite a while. No matter what
else happens, M$ is starting to lose it's image, even amongst the suit and tie
crowd. And all this has happened because of the tireless efforts of ordinary
people, particularly PJ.

This is what the internet is all about. People getting together and sharing
information. In this case, sharing enough information to seriously embarrass
the richest man in the USA, Bill Gates.

PJ, you can tell that you're doing a bang-up job simply by the amount of
complaining that McBride does about groklaw.net. The more he says it, the more
I think of Scooby Doo; 'And I would've gotten away with it if it weren't for
those meddling kids!'

You go girl!

[ Reply to This | # ]

How Curious. Let's ask MS
Authored by: webster on Thursday, March 11 2004 @ 12:06 AM EST

A Microsoft spokesman says that the company has no 'direct or indirect' financial relations with BayStar, but declined to comment when asked whether execs called BayStar to suggest investing in SCO."

Did these same execs have anything to do with the the $12,000,000 license deal?

Why didn't they just make it an above board $62,000,000 license deal?

---
webster

[ Reply to This | # ]

IBM move doubtful
Authored by: Anonymous on Thursday, March 11 2004 @ 12:13 AM EST
When this is all over, I doubt IBM will move their headquarters to Redmond.
Probably just their AIX Division.

[ Reply to This | # ]

Must... get... back... control... of... our... stock price...
Authored by: belzecue on Thursday, March 11 2004 @ 12:13 AM EST
Yep. The SCObots have to buy back that stock, because it is awfully
inconvenient having the public screw up your carefully timed and managed stock
manipulation. How can you paint the tape, kiting the value in 100-unit
increments, when these silly common stockholders and institutions keep panicking
and flooding the market whenever SCO has a new lie exposed?

[ Reply to This | # ]

Who'd have thunk it.!
Authored by: Anonymous on Thursday, March 11 2004 @ 12:16 AM EST
...the tinfoil hats have become stylish.

[ Reply to This | # ]

OT: Novell Legal Team
Authored by: greg_T_hill on Thursday, March 11 2004 @ 12:39 AM EST
Saw this on Yahoo SCOX. I thought it was a joke, but
Novell's legal team for the SCOG case is at
http://www.mofo.com.

Of interest on their front page is a piece titled: "The
Trade Secret's Out: Injunctive Relief to Prevent
Web-Posting of Already Public Information Violates Free
Speech"

[ Reply to This | # ]

Business Week: MS Did Ask BayStar If They'd Like to Invest in SCO
Authored by: fmouse on Thursday, March 11 2004 @ 12:41 AM EST
"BW Online has learned that Microsoft (MSFT ) did not put up the money, but did play matchmaker for SCO Group (SCOX ) and BayStar Capital, a San Francisco hedge fund which made a $50 million investment in SCO last October."

I find it very difficult to believe that BayStar did this simply because Microsoft suggested that they do it. Venture capital firms that have that kind of money to invest didn't get that kind of money by being generous, or stupid. It doesn't take a rocket scientist to know that "litigation is not a business model", unless you're a law firm, and then you make money by handling other people's litigation. If it wasn't a direct payout, then something else went down here that we don't know about yet.

Microsoft plays hardball. There has to have been a quid pro quo involved that still isn't out in the open. Something is in it for BayStar other than simply the pleasure of making nice with Microsoft. When we find out what that something is, we'll be getting close to where the rubber hits the road in this matter.

[ Reply to This | # ]

OT: Open Source for Capitalists
Authored by: Tim Ransom on Thursday, March 11 2004 @ 01:01 AM EST
Essay called Open Source for Capitalists.

---
Thanks again,

[ Reply to This | # ]

Trick to bolster stock value?
Authored by: yorgasor on Thursday, March 11 2004 @ 01:23 AM EST
"the company's board of directors has authorized management, in its discretion, to purchase up to 1.5 million shares of SCO's common stock over the next 24 months."

If stock buybacks show the company is confident of its success, such a move would likely raise the stock price. Now, this particular announcement doesn't say they have purchased stock, or that they will purchase stock. It just says that they may purchase stock when they feel like it (within accordance to SEC regulations).

With the stock price diving so bad the last couple days, it wouldn't surprise me if this was just a gimmick to stop the nose dive. The beauty of it is, they don't have to do anything, or spend a dime if they don't want to.

[ Reply to This | # ]

BayStar 'Strategy'
Authored by: Tim Ransom on Thursday, March 11 2004 @ 01:40 AM EST
Some interesting tidbits from BayStar's Strategy page:

'The technology executives that have invested in BayStar are an invaluable resource to our portfolio companies, offering industry insights and introductions to key industry contacts.'

and:

' The fund also benefits from industry intelligence from technology executives that are investors in the fund. '

also:

'Capital needs of $5 to $50 million are targeted towards acquisitions, product development, marketing or sales expansion, or as a bridge to a public offering.'

(Nothing about using it to stay afloat while you sue IBM.)

and the classic:

'Investment criteria include:

*An experienced management team with relevant skills and expertise.

- snicker

*A well articulated, growth-oriented business plan.

- Not exactly what we're witnessing

*Sustainable growth and increasing market share for revenue producing companies.

- Did they look at the SEC filings or what?

*Leading technology and demonstrable, objective progress for development stage companies.

- Code that says 'BRAAK! It's a living!' is not what I'd call 'Leading technology'

*Appropriate use of proceeds.

- No comment required.

---
Thanks again,

[ Reply to This | # ]

Good humour
Authored by: Night Flyer on Thursday, March 11 2004 @ 01:41 AM EST
In browsing Yahoo message board found a well written one (serious tonge-in-cheek
humour) by Miss Cleo:

"Re: The buyback plan is a crock"

http://finance.messages.yahoo.com/bbs?.mm=FN&action=m&board=1600684464&a
mp;tid=cald&sid=1600684464&mid=107995

[ Reply to This | # ]

Can somebody explain the redemption
Authored by: Anonymous on Thursday, March 11 2004 @ 01:47 AM EST
If the price falls to far, to allow BayStar to invoke the redemption option,
what happens for SCO and BayStar, and who gets what?

[ Reply to This | # ]

Stock buyback: SCO makes sure there is no money left for IBM
Authored by: Anonymous on Thursday, March 11 2004 @ 02:47 AM EST
Maybe I'm becoming too synical, but to me this means that SCO is going to burn
the money that is still left from te PIPE deal. The money probably is going to
buy the stock from insiders.

Darl didn't make his bonus, so he needs to be compensated in another way.

Does SCO need to register with the SEC how much they pay for the stock they
buy?

H@ns

[ Reply to This | # ]

No money left: Remember the MS Warrants
Authored by: Anonymous on Thursday, March 11 2004 @ 02:52 AM EST

Forget the accounting games. They called the licenses revenue, but when you get
cash and give stock warrants, as they did to Sun and MS, it is really
an investment. If the warrants get exercised, they either have to issue more
stock or buy it back.

The warrants are carried on their books with Black-Scholes valuation, which
understates the real liability if they are exercised. If the stock is going up,
issuing new stock (diluting equity) is the thing to do--the investors won't care
about dilution because they are expecting capital gains. But they can't dilute
equity right now, because that would cause a drop in stock price and trigger the
Baystar provisions.

So my guess: someone with a lot of warrants wants to bail, and the game is
over. All the investments are hedged and there never was any free operating
cash to cover expenses.

Remember kiddies: to have real cash flow you have to have real income. If your
only income is hedged investments, then you have to give it back when the
party's over.

=John Goodwin= (not bothering to log in)

[ Reply to This | # ]

SCO stock buy-back
Authored by: Anonymous on Thursday, March 11 2004 @ 02:55 AM EST
I have some questions. The press release about the buy-back includes the following:

The repurchase program will allow SCO to repurchase its shares from time to time in accordance with the requirements of the Securities and Exchange Commission on the open market, in block trades and in privately negotiated transactions, depending on market conditions and other factors. [emphasis added]

Would this allow SCO to buy back the shares the SCO officers had told the SEC they were planning to sell off on a regular schedule? Could SCO pay those officers more than the street price for the shares and not disclose from whom the shares were bought and at what price? How many shares do the SCO officers still have that they are trying to sell off?

Since I don't know SEC regulations, I was just wondering if this could be the plan.

[ Reply to This | # ]

Business Week: MS Did Ask BayStar If They'd Like to Invest in SCO
Authored by: Anonymous on Thursday, March 11 2004 @ 03:33 AM EST
<i>He says Microsoft didn't put any money into
BayStar</i><br>
Maybe indirect?

The point is that the ghost is out of the bottle. What they hope they can do is
tell something en hope the public don't find out the reallity is wors than they
tell. Just satisfy their curiousity with something... just manipulation and
p.r.

But does it matter if Microsoft gave monney to Baystar? They are involved ,
that matters

[ Reply to This | # ]

That was not Baystar's story then...
Authored by: dodger on Thursday, March 11 2004 @ 03:48 AM EST
If I recall correctly, BayStar said its investments in SCO were part of a hedge.


However, in their literature they explained that Microsoft made up a large
portion of several portfolios.

[ Reply to This | # ]

Business Week: MS Did Ask BayStar If They'd Like to Invest in SCO
Authored by: Anonymous on Thursday, March 11 2004 @ 04:18 AM EST

I have to say, one thing I've noticed in this whole imbroglio, is that no one,
not SCO, not MS, not Bay Star, has ever said "MS is not involved
financially with Bay Star or RBC."

It's always "MS has no involvement with the *Bay Star* deal." RBC
never comes into it, or at least into the public statements.

So. I suspect that MS *is* heavily involved in this deal, not just with a phone
call, but *financially*. Through RBC. Only because it seems unnatural that
involvement with or through RBC has not yet been denied.

[ Reply to This | # ]

Why the stock slide?
Authored by: Anonymous on Thursday, March 11 2004 @ 05:01 AM EST
As I see it, investors - sorry, *speculators* - believed that SCO's (implicit,
nudge nudge, say no more) strategy was to be bought out by IBM. Nobody (except,
as it turns out, IBM) really wanted the suits to actually go to court, they were
just a bug-them-until-they-buy-us strategy.

Now it's becoming clear that IBM just isn't interested, and that SCO's strategy,
such as it is, is really to act as a stalking horse for Microsoft's FUD. The
suits are revealed as paper tigers, and SCO really has no plan other than to hit
Bill and Steve for more money.

But now that the mainstream press is slowly, oh so slowly, noticing the strings
attached to SCO's limbs and following them upwards to see who's pulling them,
their value to Microsoft is gone. Microsoft are already distancing themselves,
and it's likely that they'll will just cut the strings and let SCO collapse.

So the suits have failed the laugh test, they'll receive no money to fund
others, IBM doesn't want them, Microsoft is backing away as fast as it can, and,
of course, SCO doesn't have any actual *products* left.

The only question now is how much damage Darl and his cronies can do with their
FUD before they finally run out of money, and who's going to be the next cats
paw for Microsoft. Don't all rush at once.

[ Reply to This | # ]

OT: SCO/Caldera transfer in pictures
Authored by: soronlin on Thursday, March 11 2004 @ 05:58 AM EST
After reading the SCO/Caldera agreement once too often I drew this. Could people
check it for accuracy please.

PJ, if you feel this would be useful feel free to grab it.

[ Reply to This | # ]

Is SCO falling back to plan A?
Authored by: ABM_rulez on Thursday, March 11 2004 @ 06:26 AM EST
Plan A has been to be bought by another company. Well IBM didn't want to jump as
they would not have any advantage whatsoever. On the other hand if there is a
smoking M$ gun SCO knowing exactly about the role of M$ would have a lever in
convincing M$ to buy SCO. It is still not known, who published the email which
triggered all those speculations. If this has been done by some SCO insiders
this could be a signal to M$ to pay before some more nasty information will
leak.

Just an idea

[ Reply to This | # ]

Paul Allen == Vulcan == Baystar == SCO
Authored by: p0ssum on Thursday, March 11 2004 @ 06:29 AM EST
This twisted little nightmare of incestuous behavior is escalating at a very
quick pace. What we need to find out is just how much money Vulcan(Paul Allen,
Ex-MS BigWig) put into Baystar for this deal. Who's to say Billy didn't just
give a wink to Pauly and the deal was done.....

Something seriously stinks about this, we are getting closer to the source, but
we haven't found the rotten egg yet.

---
There are 10 types of people in this world, those that understand binary and
those that do not.

[ Reply to This | # ]

PJ, you rock!
Authored by: Anonymous on Thursday, March 11 2004 @ 06:29 AM EST
You are hard working on educating the masses and debunking all that FUD. There's
even a trailer out there dedicated to you:

www.bravegnuworld.org

Keep up and spread the word! ;-)

[ Reply to This | # ]

TSG Basic
Authored by: phrostie on Thursday, March 11 2004 @ 06:48 AM EST
"And now SCO announces a stock buyback."
1 if SCOX > 16 sell
2 if SCOX > 20 sell-fast
3 if SCOX < -10 Buy.
4 PRINT "Press Release"
5 REM jack price.
6 GOTO 1
7 REM sell at inflated rate.


---
=====
phrostie
Oh I have slipped the surly bonds of DOS
and danced the skies on Linux silvered wings.
http://www.freelists.org/webpage/snafuu

[ Reply to This | # ]

  • TSG Basic - Authored by: Anonymous on Thursday, March 11 2004 @ 08:56 AM EST
  • TSG Basic - Authored by: Anonymous on Thursday, March 11 2004 @ 11:04 AM EST
Business Week: MS Did Ask BayStar If They'd Like to Invest in SCO
Authored by: Anonymous on Thursday, March 11 2004 @ 07:35 AM EST
"Their intellectual property is seriously valuable: look, we're paying $20m
(or whatever it was) for a license, and our software is a long way from being a
unix-clone. Once they get the seed funding they can realise their property
against other companies who aren't necessarily as ethical as us. Like RIAA
did."

Of course, this kind of speculation is on exactly the same level as MS-FUD.
Even if we accept the story in full, it still doesn't tell us in what capacity
the unnamed MS person was acting. Just as Anderer (whose prose I find far too
illiterate to take seriously if it ever came my way) may not be a credible
intermediary.

[ Reply to This | # ]

Business Week: MS Did Ask BayStar If They'd Like to Invest in SCO
Authored by: deList on Thursday, March 11 2004 @ 09:04 AM EST
"The repurchase program will allow SCO to repurchase its shares from time to time in accordance with the requirements of the Securities and Exchange Commission on the open market, in block trades and in privately negotiated transactions, depending on market conditions and other factors."

So does this mean that they can selectively repurchase from individuals that they wish to reward?

---
"The problem with SCO is not them misunderstanding. It is daring anyone to call them on their misinterpretation." - Anon, 1/13/2004

[ Reply to This | # ]

No 'direct or indirect' involvement?
Authored by: Anonymous on Thursday, March 11 2004 @ 09:59 AM EST

A Microsoft spokesman says that the company has no 'direct or indirect' financial relations with BayStar, [...]

Well, the Baystar page doesn't list it now, but M$ has invested with them in the past. The were the 5th biggest. Paul Allen's company was 2nd, IIRC.

[ Reply to This | # ]

SCO Stock Buyback is FUD/PR
Authored by: nealywilly on Thursday, March 11 2004 @ 12:01 PM EST
SCO can't cash the check their ass wrote when they agreed to the following terms
in the PIPE deal.

Article IV.D(iii):

The Corporation may not deliver to a holder a Company Redemption Notice unless
on or prior to the date of delivery of such Company Redemption Notice, the
Corporation shall have segregated on the books and records of the Corporation an
amount of cash sufficient to pay all amounts to which the holders of shares of
Series A-1 Preferred Stock are entitled upon such redemption pursuant to Article
IV.D(i).

That effectively means $50 million of cash has to stay on SCO's books. Given
the conrol of Baystar/RBC, they can't risk not having cash in case there is a
mandatory redemption.

Heres Article IV.D(i):

(i) The Corporation shall have the following rights to redeem shares
of the Series A-1 Preferred Stock:

(a) In the event of a Mandatory Conversion, the Corporation shall have
the right to redeem any shares of Series A-1 Preferred Stock not converted in
connection with such Mandatory Conversion due to the limitations on conversion
contained in Article XIV, at a price per share of Series A-1 Preferred Stock
equal to the greater of (x) the Face Amount plus all accrued but unpaid
Dividends, or (y)(i) the Face Amount divided by the Conversion Price (calculated
as of the date of the Mandatory Conversion Notice), multiplied by (ii) the
Closing Sales Price of the Common Stock on the date of the Mandatory Conversion
Notice.

(b) If the Closing Sales Price of the Common Stock is less than $10.50
(as adjusted to reflect any stock dividends, distributions, combinations,
reclassifications and other similar transactions effected by the Corporation in
respect to its Common Stock) for at least twenty (20) consecutive trading days,
the Corporation shall have the right to redeem any shares of Series A-1
Preferred Stock then outstanding at price per share of Series A-1 Preferred
Stock equal to the Face Amount plus all accrued and unpaid Dividends thereon
through the closing date of such redemption.

(c) At any time after the third anniversary of the Series A Issuance
Date, the Corporation may redeem any shares of Series A-1 Preferred Stock then
outstanding at a price per share of Series A-1 Preferred Stock equal to the
Liquidation Preference (as defined in Article IX, below).

nealywilly

[ Reply to This | # ]

Business Week: MS Did Ask BayStar If They'd Like to Invest in SCO
Authored by: Avenger on Thursday, March 11 2004 @ 12:04 PM EST
"but says neither Chairman William Gates nor CEO Steve Ballmer were among
them."

Of course, everyone says it was Paul Allen.

[ Reply to This | # ]

Business Week: MS Did Ask BayStar If They'd Like to Invest in SCO
Authored by: alphajim on Thursday, March 11 2004 @ 12:46 PM EST
as others have noted, stock buy back is a classic way to prop a stock price up.
Unless the stock is highly undervalued, the market usually disapproves. Could
they be covering their own short positions or those of BayStar?

pump-dump-hedge-short-buyback - profit

I'm waiting for SCO to re-incorporate off-shore like amiga did just before the
execs did the final looting of the company (Does that trick still work?)

[ Reply to This | # ]

SCO stock repurchase
Authored by: Anonymous on Thursday, March 11 2004 @ 01:02 PM EST
One way to pump your stock price up is to buy shares with your corporate funds.
Government banks keep currencies at certain levels by buying and selling. Why
not use the $50 million to pump the stock while executives exercise their
options at lower prices to sell back to the corporation at inflated prices.

Sweet deal for some one!

[ Reply to This | # ]

SCO stock buy back.
Authored by: Anonymous on Thursday, March 11 2004 @ 01:17 PM EST
13,824,000 are the shares outstanding Netscape shows now. The SCO board has
authorized the buy back of 1.5 million shares. That's a lot of shares exercise
your options at a low price, then sell to the company at a higher price.

I wonder what the SEC thinks of this? Other investors may be interested also.

[ Reply to This | # ]

Business Week: MS Did Ask BayStar If They'd Like to Invest in SCO
Authored by: Anonymous on Thursday, March 11 2004 @ 03:41 PM EST
Here is what I think Mike Anderer is doing right now: he is sitting in a
government office telling every single detail of what happened between SCO,
Microsoft, and BayStar.

Why? Because the SEC is after him for facilitating a possibly illegal deal, the
DoJ is after him for possibly facilitating an anti-trust violation, and IBM is
after him for facilitating an attack on its Linux business.

They all could take him to court, but they what they really want is his
information on what really happened, and so they told him, "Sing to us, and
we will let you off easy."

For that reason, I believe Mike Anderer is at this very moment sitting in a
government office telling every single detail of what happened between SCO,
Microsoft, and BayStar.

[ Reply to This | # ]

Business Week: MS Did Ask BayStar If They'd Like to Invest in SCO
Authored by: Anonymous on Thursday, March 11 2004 @ 03:59 PM EST
I suppose that MS is going to claim that it had nothing to do with the SCO suit
and they were just giving BayStar some friendly advice on how to make some
money. However, that wouldn't fly.

Suppose MS said, "You could make a lot of money investing in SCO."
BayStar would ask, "Why?" MS couldn't give the normal investing
answer, "They have a good product line that has an excellent prospect for
future sales." That's because BayStar would investigate and find out it
isn't true."

Instead MS would have to say, "Because it has a lawsuit against IBM that
could win billions." So investment advice would have to be about the
lawsuit. Which, of course, is a gross anti-trust violation.

Of course, what really happened was probably something more like, "Invest
and we will slip you some very profitable business later," or "invest
or we will strong-arm all your other customers into dropping you."

It will be really interesting what Goldfarb is going to say to the SEC. He
could lie, but that could get BayStar in more trouble in the long term. My guess
is that he will tell the truth, and MS is going to be in very big trouble.

Now you might think that he would be afraid to tell the truth because MS could
retaliate, but if he doesn't then IBM could retaliate, and it is even bigger.
Besides, MS is going to be under very close scrutiny due to this, and so it
would have a hard time retaliating without it being noticed and bringing down
major penalties on itself.

As I said in a previous post, for MS to try to steer money to the lawsuit was a
very risky maneuver, and it says to me that MS is so scared of Linux that it is
willing to take foolhardy risks to fight it.

[ Reply to This | # ]

SCOX stock
Authored by: Anonymous on Thursday, March 11 2004 @ 04:08 PM EST
Crazy stock pattern today. Started at 9.4, quickly shot up to 10.2 on heavy trading, just as quickly dropped to 9.5 still on heavy trading, then oscillated around 9.7 all day on light trading, then an hour ago suddenly plunged to 9.3 on moderate trading.

Any experts care to explain what is going on?

link

[ Reply to This | # ]

  • SCOX stock - Authored by: DB on Thursday, March 11 2004 @ 04:25 PM EST
Harsh Scrutiny for SCO -- Microsoft
Authored by: LionKuntz on Thursday, March 11 2004 @ 09:55 PM EST


Harsh Scrutiny for SCO -- Microsoft

This comment appeared in an article three hours ago on Microsofts MSN - MSNBC website:

http://msnbc.msn.com/id/4509173/

"There's no smoking gun yet showing an orchestrated Microsoft executive-level pulling of SCO's puppet strings. What there is, however, is rather unseemly involvement by Microsoft around the periphery of SCO's funding," Haff said. "Given that Microsoft, on the one hand, is a convicted monopolist and that, on the other, SCO's financial dealings and actions look increasingly shady, Microsoft should certainly be worried about even a little bit of SCO's stench rubbing off."


http://trends.n ewsforge.com/trends/04/03/11/0819219.shtml

"...the managing partner of BayStar Capital of Larkspur, Calif., did admit that senior executives from Microsoft approached him to ask BayStar to make such an investment. The managing partner, Lawrence Goldfarb, told BWO that neither Chairman Bill Gates or CEO Steve Ballmer were among the executives making the overture and did not name them. ..."

"...We established in Tuesday's story that there exist many connections between Microsoft's overall strategic goals, its deep pockets, people who have been friends and allies for a long time, and the immediate need to stay alive experienced by SCO Group. This all would fit logically with the Microsoft executives going to visit Goldfarb in Larkspur.

Why Goldfarb and BayStar would want to place such an investment in a struggling software company with a dying primary market, major public-image problems, and a mere $20,000 in licensing income in its last quarter is a question yet to be answered. This is not addressed in the BWO story; NewsForge intends to follow up on this as soon as possible. ..."


http://www.informationweek.com/story/showArticle.jhtml?articleID=18311295 < P> "...What's really needed is a clear, unequivocal explanation of the nature of the company's [Microsoft's] relationship with SCO. As you may recall, SCO revealed last May that Microsoft had signed a contract to license some of its Unix code for an undisclosed amount. A few months later, Microsoft signed an extension to that original agreement that included additional technology and usage rights. The second deal was not disclosed by either company. Together, the deals were worth about $16.6 million, a significant 21% of SCO's total revenue in fiscal 2003.

The mystery behind Microsoft's arrangement with SCO could be cleared up, and maybe some of the speculation put to rest, if Microsoft would disclose more details about how it plans to use SCO's technology. But it won't. I've asked for that information four times in the past 12 months, but Microsoft will only discuss its plans in the broadest terms, and even then unconvincingly. Microsoft has indicated that it intends to use SCO's Unix code in Microsoft's Services For Unix product, a subsystem of Unix APIs and protocols that helps customers move Unix or Linux applications over to Windows or lets those mixed environments co-exist through interoperable files and directories.

But I was surprised to learn that Services For Unix version 3.5, when it was released in January, didn't include any of the new SCO code available to Microsoft through the licensing agreement. SCO's technology "wasn't a factor in this release," Dennis Oldroyd, a director with Microsoft's Windows server group told me in a January briefing on SFU 3.5. Oldroyd explained that Microsoft was "pretty far in the development cycle" for SFU 3.5 when the SCO license was signed.

...Last week, when I asked Microsoft for the fourth time about its plans to use the code that's at the center of the technology industry's biggest legal storm, here's Microsoft's E-mail response in its entirety: "The terms of Microsoft's agreement with SCO are confidential. As such we can't disclose full details or financial terms. That said, the license with SCO was extended under the option in the original agreement, to grant rights to additional technology related to Unix interoperability and broaden MS rights around already licensed technology. The end result is more flexibility in potential product design, development and deployment. ..."




[ Reply to This | # ]

At this instant Google News has 93 Stories
Authored by: LionKuntz on Thursday, March 11 2004 @ 11:44 PM EST
At this instant Google News has 93 M$-$CO Stories

Report outlines Microsoft-SCO link
Sydney Morning Herald - 30 minutes ago
Senior Microsoft executives asked the managing partner of Baystar Capital
Investment whether he would be interested in investing in The SCO Group about
two months before Baystar made an investment, a report in BusinessWeek claims.
Investment firm confirms Microsoft link to SCO CNET News.com
Microsoft's Ties To SCO Confirmed By Investment Group TechWeb
Australian IT - MacWorld - ComputerWorld - The Register - and 93 related »


LOTS of TV stations reporting on it tonight.


[ Reply to This | # ]

"seemingly interminable issues with SCO"
Authored by: Anonymous on Friday, March 12 2004 @ 12:39 PM EST
What issues would these be? SCO is doing nothing which should prevent the uptake of Linux. Their actions have no credibility, surely any competent manager can see that?

In fact, their actions only serve to show that Linux has considerable credibility as a useful OS in many application areas.

[ Reply to This | # ]
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