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Buybacks and More on BayStar |
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Thursday, March 11 2004 @ 05:42 PM EST
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Newsforge continues its investigation into the BayStar deal. It seems Mr. Anderer is nowhere to be found: "S2, the Mike Anderer ('Halloween X') company that is suspected of brokering the big transaction for SCO Group, has all but disappeared from the face of the Earth. Its Utah business license has expired, its Web site is dead, and no one seems to know where Anderer is located. S2 had an office in Redmond, Wash. that now appears to have morphed into another company we discussed on Tuesday called Entirenet. S2 also had offices listed in Salt Lake City, Columbia, S.C., Royal Oak, Mich., and Charleston, S.C. until recently. All the phones are now dead except for the one in Michigan, which now belongs to another company that has no idea who S2 is -- or was." Hmm. Curiouser and curioser. NewsForge emailed Mr. Anderer using an address SCO provided, but they got no reply and they publicly ask him to contact them.
Peter Galli, who was on the BayStar story back in October, has a thorough piece today also. Here's what he found out: "BayStar, which is based in Larkspur, Calif., and has investments in other hardware and software companies including Neoware Inc., Roxio Inc., Commerce One Inc. and Neoware Inc., structured its $50 million investment in SCO as a private placement of non-voting Series A Convertible Preferred Shares.
"These shares are convertible into common equity at a fixed conversion price of $16.93 per share—the average closing bid price for the company's common stock for the five trading days prior to and including the date of closing.
"Once converted, BayStar will own an aggregate of approximately 2.95 million shares of SCO common stock or 17.5 percent of the company's outstanding shares. . . .
"'Yes, Microsoft did introduce SCO to BayStar as a possible investment opportunity, but I need to reiterate that Microsoft did not participate in the SCO investment and is also not a participant or investor, either directly or indirectly, in BayStar,' McGrath told eWEEK on Thursday.
"McGrath declined to speculate on why Microsoft might have wanted to point BayStar towards SCO as a possible investment, saying 'you'd have to ask Microsoft that.'" MS's mantra remains the same, they have "no direct or indirect financial relationship with BayStar." OK, what about EV1? Galli goes into some detail about that too: "Asked about the relationship between Microsoft, EV1Servers.Net and SCO, Microsoft spokesman Martin would only say that 'Microsoft had no involvement in the EV1 and SCO relationship. Microsoft is pleased to call EV1 a customer and an industry partner. However their dealings with other companies are their own.'" Of course, it was MS who told us for months that they had no involvement in the BayStar PIPE at all, as Galli points out. Newsforge thought to inquire directly if Microsoft had any involvement through the Royal Bank of Canada: "When asked Thursday if Microsoft or any of its divisions had any input into the Royal Bank of Canada portion of the PIPE deal, Microsoft spokesman Martin told NewsForge that 'Microsoft had no involvement in that matter.'" Now, about the buyback, the question is why. SCO's answer is that they are doing it to show their confidence in their stock: "'This action reflects our strong belief in the fundamental value of our intellectual property and core business,' said SCO chairman of the board Ralph Yarro. '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.'" Could be. If you are interested in knowing why companies do buybacks, as I was, you'll find that is indeed one reason why companies do buybacks.
Bain & Company's Darrell Rigby, a Director at Bain & Company, a Boston-based global business consulting firm, has an article that explains buybacks, and they say companies do it for several possible reasons: "Companies typically use Stock Buybacks to reduce dilution of their earnings. When a company buys back its own shares, it reduces the amount of stock in circulation. Future profits then are spread across fewer shares, potentially increasing a company’s earnings per share and the value of its stock. . . . Private trades allow a firm to buy out unwanted shareholders, self-tenders provide a method for repurchasing larger amounts of stock, and accelerated purchases allow a firm to immediately recognize the financial impact of the program. If successful, Stock Buybacks provide a more taxefficient method of profit distribution to shareholders, as capital gains are often taxed at lower rates than dividend income. Additionally, Buybacks are less binding to a company in the long run—they do not require SEC disclosure and can be scaled back under much less analyst scrutiny than a dividend reduction. . . . "Companies use Stock Buybacks to:
- Build investor confidence and shareholder loyalty;
- Increase earnings per share and return on equity;
- Obtain company assets at bargain values;
- Boost share price by signaling that the stock is undervalued;
- Increase the company’s debt-equity ratio through shifts in financing structure;
- Offset dilution effects that are caused by the exercising of employee stock options."
There is also a research paper, "When a BuyBack isn't a Buyback." You can get the PDF on this page, or as HTML here. Finally, BusinessWeek did a report on buybacksback in 2002, "The Buyback Boomerang": "Some critics believe the buyback frenzy was nothing more than executives seeking to maximize their own wealth. 'They boost the price in the short term and then sell their shares,' says Kathleen M. Kahle, a University of Pittsburgh finance professor and author of the February, 2002, study When a Buyback Isn't a Buyback. Kahle found that the higher the percent of in-the-money options held by top brass, the more likely the company was to execute a buyback plan. The cycle of issuing options--and offsetting shares once options were exercised--pushed share prices ever higher and fed the stock market bubble. . . .
"In the '80s and '90s, the mere announcement of a buyback would give a stock a 3% to 4% pop without spending a cent. Now, such signaling is likely to backfire, says Merrill's Plohn. Companies that announce a buyback but never follow through on it risk creating a credibility problem with investors. 'It looks like you were just trying to hype the price of the stock,' says Plohn.
"Investors must realize that they can't take buybacks at face value. Many repurchases have been little more than costly attempts to jack up share prices and enrich execs. Ultimately, the only reliable driver for share prices is profits." If the hope was to inspire confidence, The Register says it hasn't worked so far. TheStreet.com puts its spin on it. And TechWeb adds: "To date, SCO's legal challenges have failed to bring much financial gain. The company reported a net loss of $2.3 million in the first quarter ended Jan. 31 on declining revenues of $11.4 million. Only $20,000 came from its Linux licensing initiative. "While there is no evidence Microsoft is bankrolling SCO's legal battles, there's little doubt as to Linux's growing strength in the market for servers, which are computers used to run business software. "Unit shipments of Linux servers increased 52.5 percent in the fourth quarter of 2003, compared to the same period the prior year; and revenue from the operating system jumped 63.1 percent to $960 million, according to International Data Corp. Unit shipments and revenue from Windows servers also increased." And just so we can follow the bouncing ball in this never-boring story, here are some urls from the past on the BayStar deal: You'll recall this story from December on the revised terms: "The agreement between the software maker and its lawyers for the high contingency fees has raised many eyebrows in the banking and high-tech industries. "The filing stated that SCO cannot be sold 'without first obtaining the consent of the private placement investors holding at least two thirds of the shares of SCO's outstanding Series A Convertible Preferred Stock.' "The filing explained that 'SCO's agreement with the law firms provides that the law firms will receive a contingency fee of 20 per cent of the proceeds from specified events related to the protection of SCO's intellectual property rights. These events include settlements, judgments, licensing fees, subject to certain exceptions, or a sale of our company during the pendancy of litigation or through settlement, subject to agreed upon credits for amounts received as discounted hourly fees and unused retainer fees and may include issuances of SCO equity securities.' "According to a filing Monday by the SCO Group, RBC and BayStar now have veto power over any SCO action that would trigger the 20-per-cent payment to SCO's attorneys at Boies, Schiller & Flexner LLP." UPDATE: Bob Mims of the Salt Lake Tribune dangles another possible motive for the buyback in front of us: "SCO parent Canopy Group, and its CEO Yarro, together own nearly 11 million, or 76 percent of SCO common shares, according to the U.S. Securities and Exchange Commission. Knowing that, Jenson speculated the buyout could be a precursor to taking SCO private." Going private would, of course, mean no more SEC filings would be required. Can that 76% figure really be accurate?
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Authored by: Anonymous on Thursday, March 11 2004 @ 09:51 PM EST |
Looks like it was effective for a few hours thei morning. Tomorow should tell if
the SCO FUD Mojo is still working.[ Reply to This | # ]
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Authored by: jerm on Thursday, March 11 2004 @ 09:58 PM EST |
Mr. Anderer would do Darl and friends a big favor and surface right now if
everything was on the up-and-up. If things were not on the up-and-up, he'll
stay out of sight.
I can't wait to see how this plays out. It's better than celebrity poker.
jerm
---
Real programmers don't comment their code. If it was hard to write, it should
be hard to understand.[ Reply to This | # ]
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- Anderer, where are you. - Authored by: Weeble on Thursday, March 11 2004 @ 10:47 PM EST
- Where's Waldo? - Authored by: Anonymous on Friday, March 12 2004 @ 01:06 AM EST
- obligatory quote - Authored by: Anonymous on Friday, March 12 2004 @ 03:22 AM EST
- Anderer, where are you. - Authored by: Anonymous on Friday, March 12 2004 @ 04:50 AM EST
- Anderer, where are you? - Authored by: Anonymous on Friday, March 12 2004 @ 05:34 AM EST
- America's Most Wanted. - Authored by: MajorDisaster on Friday, March 12 2004 @ 08:57 AM EST
- Anderer, where are you. .. ... ..... ....... - Authored by: Anonymous on Friday, March 12 2004 @ 12:12 PM EST
- Anderer, where are you. - Authored by: Anonymous on Friday, March 12 2004 @ 01:53 PM EST
- Anderer, where are you. - Authored by: Anonymous on Friday, March 12 2004 @ 04:34 PM EST
- ANDERER JUST POSTED A USELESS LETTER - Authored by: Anonymous on Friday, March 12 2004 @ 08:35 PM EST
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Authored by: Anonymous on Thursday, March 11 2004 @ 10:05 PM EST |
Can they use the buyback to buy the shares if BayStar decided to convert the
note to shares? This way BayStar can probably get a lot more than selling the
shares in open market.
SCO obviously is in no shape to repay the note, and that may be a way out for
BayStar with limited loss.
Another point that I find it puzzling about the buyback. Company ususally do
that when they have lots of cash. SCO do have a fair amount of cash, but they
also have a very large legal bill. Buying back shares is going to hurt their
liquidity, and reduce the amount of time they can afford to fight this battle.
[ Reply to This | # ]
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Authored by: freeio on Thursday, March 11 2004 @ 10:07 PM EST |
This sort of a buyback arrangement would be a reasonable way to make
pre-arranged stock purchases from the big holders (i.e. insiders) and thus to
transfer money from the company directly to these individuals/entities. Doing
so quickly would meet their stated criteria. There is nothing about a buy-back
arrangement that says that the open market would be the method used.
If the company is seen (internally) as having a limited future, then legal
transfers of cash from the company to large investors would "save"
that from the certain loss which would come with bankruptcy. The small
investors can be safely left holding the bag, as is the case with any real con
job.
---
Tux et bona et fortuna est.[ Reply to This | # ]
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Authored by: Anonymous on Thursday, March 11 2004 @ 10:20 PM EST |
Here is the Groklaw
story
that compared Series A and Series A-1.
You should notice there is a crucial
restriction on the company that prevents it from issuing dividends or buying
back stock.
... the Corporation shall not take any of the
following corporate actions ...
(v) redeem, repurchase or otherwise acquire,
or declare or pay any cash dividend or distribution on, any Junior Securities.
Notwithstanding the foregoing, the Corporation shall, without the prior approval
of the Majority Holders, be entitled to repurchase Junior Securities from
employees of the Corporation in connection with employee compensation plans
approved by the Corporation's Board of Directors;
So either
BayStar/RBC approves of a general buyback, or this is intended only for SCO
employee's and officers. The 1.5 million figure of the buyback program exactly
matches the amount set aside and registered for SCO's employee incentive plan.
Be aware that BS&F received 400K shares under this employee incentive
plan.
Digging done by many posters to the Yahoo! Finance stock board.
Thanks so much. [ Reply to This | # ]
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Authored by: Anonymous on Thursday, March 11 2004 @ 10:22 PM EST |
s/curioser/curiouser/gi [ Reply to This | # ]
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- typo - Authored by: Anonymous on Friday, March 12 2004 @ 07:04 AM EST
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Authored by: Anonymous on Thursday, March 11 2004 @ 10:27 PM EST |
A lot of people are commenting on the new admission by BayStar that M$
suggested BayStar invest in SCO. They seem to think that M$ will get into
trouble over this. But an article on C|Net
asked a lawyer about that. Here's what the article says:
Helping SCO
find funding may in fact advance Microsoft goals that are anticompetitive, but
it isn't necessarily a basis for a lawsuit under the Sherman Antitrust Act, said
Andy Gavil, an antitrust expert at the Howard University School of Law. The
reason: Filing lawsuits is protected under the First Amendment. "There are many
examples of firms funding somebody else to sue their rivals. Sure, their
underlying goals are anticompetitive, but they're exercising First Amendment
rights in filing lawsuits," Gavil said. "Even if the goal is to squelch
competition, as it frequently is in patent and copyright cases, it can't be a
violation of the Sherman Act if all you're doing is exercising your valid right
to initiate litigation."
And it goes on to say:
"The Microsoft
settlement with the DOJ does not cover something like this. It dealt with
commitments about interoperability and dealings with OEMs," Donovan said,
referring to original equipment manufacturers, a term for computer makers.
"There was no broad provision that said (Microsoft) shouldn't do anything else
to harm other operating system owners or providers."
So, even if all
this is true, what difference does it make?[ Reply to This | # ]
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Authored by: MyPersonalOpinio on Thursday, March 11 2004 @ 10:34 PM EST |
There is a rather nasty possibility for the buyback (from a SCOX short
perspective). Given the apparent extremely low availability for SCOX stock, they
may attempt to produce a short squeeze (a.k.a. cornering the short
market)
From the SCOX float numbers as reported in yahoo finance, there
shouldn't be availability problems (e.g., the Motley Fool indicates that
availability squeezes may occur when short/float is above 50% and SCOX is not
quite there yet). In the yahoo message boards a few people have mentioned
getting recall notices, even when this ratio was much lower. These recalls
indicate that the low availability is real. Maybe the float figures are missing
something?. I checked the NASDAQ definitions for float (notice that not meeting
a minimum float cold cause a stock to be delisted although SCOX seems to still
have some wiggle room, even if the buyback is executed fully). When an
individual or institution has more than 10% ownership in a company their portion
it is no longer considered public float. Insider ownership is not public float
either. Maybe the mutual funds are not holding more than 10% and their portion
is considered public float even though they may not make their shares available
for borrowing?
Short squeezes done on purpose are conspiracies to alter the
price of securities (and the SEC has punished in the past manipulators doing
short squeezes on purpose) but they may be quite difficult to prove. I hope that
SCOX has too many eyeballs on them and in this case it won't be that easy. [ Reply to This | # ]
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Authored by: moogy on Thursday, March 11 2004 @ 10:36 PM EST |
Buyback programs for some of the reasons stated above
can make sense in some situations.
SCOG has seriously dwindling revenue streams. Despite the
license "sales" shows losses. And knowingly looks forward to
at least two more years of legal battles just with the
cases they currently have and say there will be plenty more
cases filed.
So where is the money coming from to make these buybacks?
It looks to me likes it's the money they got from their
investors, the previous stock sales, that is being used
to buy their own common stocks.
This is supposed to generate confidence in the company
and it's leadership?
That's incredible, as in not credible.
---
Mike Tuxford - irc.fdfnet.net #Groklaw
First they ignore you, then they laugh at you,
then they fight you, then you win. --Gandhi
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Authored by: Anonymous on Thursday, March 11 2004 @ 10:47 PM EST |
There is a very important deadline upcoming that is little reported. Look at
the filings for SCO on
SEC's Edgar. On 2003-11-17 you see a form S-3
registration statement for the common stock shares to which BayStar/RBC can
convert. On 2004-01-16 you see an S-3/A which is an amended version of the
same. Finally on 2004-02-11 there is yet another S-3/A. These filings are
required by the agreement between SCO and BayStar/RBC so that when they elect or
are forced to convert, there will be common shares available for them. A
Groklaw article has previously contrasted the changes in the amended proposed
registration statements. No prospectus has yet appeared, and this suggests the
SEC has not yet approved the registration statement, and it has not become
effective. The agreement between SCO and BayStar/RBC has specific language
about deadlines by which the registration must be become effective, lest a
redemption event be declared.
The "Registration Deadline" means
(i) the ninetieth (90th) day following the date hereof if the Registration
Statement receives a "no review" from the SEC; (ii) the one hundred
thirty-seventh (137th) day following the date hereof if the Registration
Statement is reviewed by the SEC; or, (iii) the one hundred fiftieth (150th) day
following the date hereof if, in connection with reviewing the Registration
Statement, the SEC also reviews the Company's filings with the SEC pursuant to
the Securities Exchange Act of 1934, as amended, and the rules and regulations
thereunder, or any similar successor statute (collectively, the "Exchange
Act").
The 150th day is this coming Sunday. Unless the
registration is approved tomorrow and a prospectus appears, BayStar/RBC will be
entitled to demand back $60M in cash from SCO. That amount may be more than
SCO currently has and could bankrupt SCO. Of course, if we are wrong about this
situation, or SCO and its preferred shareholders negotiate an extension, or the
preferred shareholders elect not to exercise their redemption with penalty
option, then nothing will happen.
But this is a very uncertain situation,
and it makes it look like the SCO share buyback program could drain the
company's money to purchase shares from the employee stock option program just
when the preferred shareholders will be demanding money back.
Again, check
this information yourself and verify against the documents and the opinions of
experts.
Information was collected and research by posters to the Yahoo!
Finance board. Thanks! [ Reply to This | # ]
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Authored by: Anonymous on Thursday, March 11 2004 @ 11:04 PM EST |
I'll bet a certain part of my anatomy that Microsoft has given Baystar a Put
Option for their holding in SCO.
A Put Option is an agreement that allows one company to require another company
to buy something at a certain price under certain conditions. Its the opposite
of a call option.
My guess is that Microsoft has given Baystar a Put Option that specifies that
they can require Microsoft to buy their SCO shares at least double (or
quadruple) what they paid for them, plus notional compound interest at maybe
15%-20% if SCO tanks or does not achieve a certain price by a certain time -
maybe three years. Baystar does not have to trigger the Put Option unless it
wants to so if SCO wins and its shareprice soars they are in the money.
To put it another way Baystar has been guaranteed a big return by Microsoft from
investing in SCO stock.
So Microsoft has not "technically" invested in Baystar or SCO. No
money has changed hands at all - yet. What Microsoft have done instead is give a
guarantee to Baystar that they simply cannot lose by investing in SCO.
Thats what Anderrer meant when he stated that Microsoft could
"Introduce" SCO to many more venture capital firms. Its easy,
Microsoft simply repeats the process of giving each VC a Put Option. No VC is
going to walk away from a double your money deal that is so simple, quick and
risk free.
Furthermore SCO can say it knows nothing about why the VC's have decided to
invest in them, it doesn't need to know about Put Options. It can also deny any
funding by Microsoft because Microsoft hasn't funded them. Microsoft can also
state truly that it hasnt invested in SCO.
The correct question to ask Baystar now is: "Do you have any option or
similar agreements regarding your holding of SCO shares with Microsoft or any
other entity?" My guess that they won't want to answer it.[ Reply to This | # ]
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Authored by: Anonymous on Thursday, March 11 2004 @ 11:06 PM EST |
We just outgrew them. Probably because we didn't realize that if we kept them
around, they were good for brokering multi million dollar deals.[ Reply to This | # ]
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Authored by: Anonymous on Thursday, March 11 2004 @ 11:07 PM EST |
Has anyone else noticed that if you take the first two initials of Mike E.
Anderer
(http://philadelphia.bizjournals.com/philadelphia/stories/1999/09/06/story6.html
)
and add them to his last name you end up with...
meanderer
A winding, crooked, or involved course;
as, the meanders
of the veins and arteries. --Sir M. Hale.
hmmmmmmm
[ Reply to This | # ]
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Authored by: Anonymous on Thursday, March 11 2004 @ 11:13 PM EST |
is looking for a man last seen together with the missing Mr Mike Anderer. The
man is believed to between 40 an 50 years of age, of average height and normal
build. Lately the man has been posing as CEO of companies selling fake IP
liceneces. The man is believed to be armed and dangerous.
[ Reply to This | # ]
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Authored by: Anonymous on Thursday, March 11 2004 @ 11:21 PM EST |
It's old news, but I did a write-up that looks at the background history of how SCO
started all of this.
It's long, involved, and likely rather boring.
However, here's the overview timeline at the end. One interesting thing is
that the Halloween
VII document that says MS will start attacking Linux using IP fits right
into the timeline:
- Jul 2002 McBride is hired
- Aug 2002
Morgan Keegan is hired
- Aug 2002 Caldera changes name to The SCO Group
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Sep/Nov/? 2002 MS memo discussing using intellectual property as an attack
against open source is floating around in Germany and later publically
- Oct
- Dec 2002 SCO later admits to beginning to look at its own intellectual
properties and first makes noise about UnixWare binary libraries.
- Jan 2003
SCO creates stronger language to indemnify its officers of criminal
activity
- Dec? 2002 - Jan? 2003 At some point Boies is brought in, likely
via Morgan Keegan, to negotiate license/stock deals with Sun and Microsoft
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Feb 2003 Morgan Keegan clarifies its arrangement with SCO and includes language
indicating they are anticipating an IBM buyout, though without naming IBM
specifically
- Feb 2003 Boies finalizes his agreement with SCO to sue
IBM
- March 2003 IBM lawsuit
- Jul/Aug 2003 Anderer joins
- Oct 2003
Anderer e-mail penned
- Oct 2003 PIPE deal
- Nov 2003 Boies has no one
from law firm at key press conference
- Nov 2003 Boies gets 20% of PIPE
deal
- Dec 2003 PIPE investors get veto power over Boies payouts
-
Nov/Dec/? 2003 16 to 20 million deal discussed by Anderer never happens
[ Reply to This | # ]
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Authored by: LionKuntz on Thursday, March 11 2004 @ 11:27 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 | # ]
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- Harsh Press Scrutiny for SCO -- Microsoft - Authored by: Maserati on Friday, March 12 2004 @ 12:40 AM EST
- "...SCO's stench" - gotta like that - Authored by: Anonymous on Friday, March 12 2004 @ 12:55 AM EST
- YANKED - Authored by: Anonymous on Friday, March 12 2004 @ 12:57 AM EST
- YANKED - Authored by: Anonymous on Friday, March 12 2004 @ 01:20 AM EST
- YANKED - Authored by: Anonymous on Friday, March 12 2004 @ 08:36 AM EST
- Harsh Press Scrutiny for SCO -- Microsoft - Authored by: fcw on Friday, March 12 2004 @ 07:55 AM EST
- Good to see MSNBC not caving - Authored by: crs17 on Friday, March 12 2004 @ 08:10 AM EST
- Linux Personality Module/ABI - Authored by: Anonymous on Friday, March 12 2004 @ 08:21 AM EST
- Harsh Press Scrutiny for SCO -- Microsoft - Authored by: Anonymous on Friday, March 12 2004 @ 09:09 AM EST
- Harsh Press Scrutiny for SCO -- Microsoft. .. ... ..... ....... - Authored by: Anonymous on Friday, March 12 2004 @ 03:29 PM EST
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Authored by: blacklight on Thursday, March 11 2004 @ 11:31 PM EST |
The backbone of any investigation is the process of collecting information, in
particular information that can be used as evidence. If Microsoft has not
engaged in improper behavior with respect to Baystar and RBC, then Microsoft has
nothing to fear. Otherwise, the strands will be woven together one at a time at
groklaw until the full web of deceit is reconstructed. At that moment, Microsoft
had best pray that it is not found to be at the center of that web.
The SCO Group is one ugly spider, but takes pride of place only because it is
the most obviously visible spider. The ugliest spider is the one that actually
put together the web along the strands of which the SCO Group is running. Both
Microsoft and Canopy may rest assured that in time, the groklaw community will
uncover the identity of the owner of that web.[ Reply to This | # ]
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Authored by: LionKuntz on Thursday, March 11 2004 @ 11:36 PM EST |
I am too tired to go back to look for it again, but I was reviewing some facts
about the Baystar Deal, and it required SCO to redeem the stock portion SCO gave
to Baystar at $16 and change. Isn't that above where the market is now, and
wouldn't this be a redemption of the stocks at that price by the folks who put
up the money behind Baystar? They (Baystar investors) can get above-market
prices paid for with the money they once loaned SCO when the stock was at
$10-$12?
SO SCO kited the stock to $20 bucks but couldn't hold it there, and the
moneybags who financed this run-up are guaranteed $16 if they haven't already
cashed in by now?
[ Reply to This | # ]
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Authored by: Anonymous on Thursday, March 11 2004 @ 11:41 PM EST |
The SEC shows a no-action letter filed on March 1. This was filed
as a paper document and no information as to its content appears readily
available.
The SEC's site says this about no-action
letters:
An individual or entity who is not certain whether a
particular product, service, or action would constitute a violation of the
federal securities law may request a "no-action" letter from the SEC staff. Most
no-action letters describe the request, analyze the particular facts and
circumstances involved, discuss applicable laws and rules, and, if the staff
grants the request for no action, concludes that the SEC staff would not
recommend that the Commission take enforcement action against the requester
based on the facts and representations described in the individual or entity's
original letter. The SEC staff sometimes responds in the form of a no-action
letter to requests for clarification of the legality of certain
activities.
Are these paper documents available anywhere? [ Reply to This | # ]
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Authored by: Glenn on Thursday, March 11 2004 @ 11:59 PM EST |
The question that keeps nagging my poor little brain is just what would
induce BayStar and canada's biggest bank to invest twenty and thirty million
dollars respectively in SCOG, a company that has never shown a profit and with
two lawsuits (at the time) pending in courts?
It is my understanding that banks (at least in the U.S.) are really
conservative in their investments and are not likely to put themselves out on a
limb with such a high risk investment. And from any logical point of view, any
investment in SCOG should be viewed as a high risk affair.
I would imagine that venture capital firms also would do a good deal of
investigating before committing twenty million dollars in such a shaky
proposition.
I am trying to take a tep back from my bias towards SCOG and am finding it
very difficult. But wouldn't a bank or venture capital firm have their legal
beagles check out the legal facts surrounding SCOG's claims and issue an opinion
on the liklihood of SCOG prevailing against IBM.
SCOG is only attractive in the long run if it prevails in its case against
IBM and receives the damages it has asked for. Are there any lawyers that are
not in the pro SCOg or pro open source camps that have made any in depth
analyses and comments on the SCOG case(s) and are they that positive?
Most of the noninvolved lawyer commets that I have seen have been very
cautious in their comments.
It would seem to me that for BayStar and RBC Canada to invest that kind of
money in SCOG, they would have to have had some kind of strong assurances from
someone that they ARE sure of, that they will not lose their investors' money.
Where would those assurances come from? Rob Enderle? Laura Didio?
The only other two companies that have made any "contributions" to
SCOg are who?
I do not have the answers, but I still have the questions.
Glenn[ Reply to This | # ]
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Authored by: utahbob55 on Friday, March 12 2004 @ 12:14 AM EST |
How will SCO be able to give their counsel 20% when they are only going to get
5%. If I am not mistaken SCO must turn over all monies collected to Novell and
is then paid back a royalty of 5%. [ Reply to This | # ]
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- About that 20% - Authored by: Anonymous on Friday, March 12 2004 @ 01:12 AM EST
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Authored by: belzecue on Friday, March 12 2004 @ 12:37 AM EST |
Friends: please consult PJ before you post anyone's personal info (e.g. home
address) on this site. If the info is publicly *and widely* available (i.e.
does not require much digging) then it is probably safe to do so. But, however
much you feel a person 'deserves' the spotlight, please treat their personal
privacy with the same respect you would
demand.
-----
Anderer's Address
Authored by: [member] on
Friday, March 12 2004 @ 12:12 AM EST
Has anyone checked out his home/business
address to see if Anderer still
lives/works there?:
[ADDRESS REMOVED]
If
you look up the S2.com URL you get this business address, but when you look
up
the property records this address comes up as a residential property, so I
don't
know if this is his home, work or both.
[ Reply to This | # ]
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Authored by: Anonymous on Friday, March 12 2004 @ 01:35 AM EST |
According to BayStar, MS
1. Did not indemnify BayStar against SCO risk
2. Did not invest as individuals (as opposed to corporate investment)
I guess this largely kills two lines of speculation
http://www.nytimes.com/2004/03/12/technology/12soft.html?ex=1079758800&en=79
bdf85f45a3dfb6&ei=5062&partner=GOOGLE[ Reply to This | # ]
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Authored by: dodger on Friday, March 12 2004 @ 01:37 AM EST |
It was that "other" guy who put the deal together. It is very possible
he didn't disappear; he could have NEVER EXISTED![ Reply to This | # ]
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Authored by: tce on Friday, March 12 2004 @ 01:37 AM EST |
here
(login required) STEVE LOHR writes about the confirmation of the Microsoft
pointer to Bay Star.
He does a pretty good job of getting the whole
story on one page... nice material from a formal source for sharing with the
unaware. For example:
Microsoft stands to gain most from any
slowing of the advance of Linux, which is maintained and debugged by a network
of programmers who share code freely. That model of building software is called
open source development.
--Tom
[ Reply to This | # ]
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Authored by: Callan.ca on Friday, March 12 2004 @ 02:16 AM EST |
____________________________________________
How many shares did SCO promise to buy back?
None. The plan merely authorizes a buyback and sets limits on the number of
shares (1.5 million) and the time for buying them (2 years.)
Why is the limit 1.5 million shares?
Under the PIPE agreement SCO can't buy back any shares except those that were
registered for issuance to employees. Currently, 1.5 million shares are
registered under the 2002 Omnibus Stock Incentive Plan.
What happens if SCO does buy back shares?
The shares are not retired; they're held in treasury. SCO ends up reissuing them
as payments to lawyers, insiders, or PIPE investors.
____________________________________________
---
IANAL, IANAP, IAAC (I am a Canadian)[ Reply to This | # ]
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Authored by: husemann on Friday, March 12 2004 @ 02:56 AM EST |
"Anderer" in German means "someone else" as in "it's
not me but someone
else"... [ Reply to This | # ]
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Authored by: davcefai on Friday, March 12 2004 @ 03:58 AM EST |
Two pieces in The Register on SCO. Both of them distinctly unsympathetic!
http://www.theregister.co.uk/content/7/36203.html
Quote: "But the move did not have the desired effect, at least during
Thursday's trading. After a brief run up to $10.18, SCO closed the day down
almost three per cent to $9.25."
and
http://www.theregister.co.uk/content/4/36202.html
Quote: "Long-term Redmond watchers will be shocked and dismayed by the
news. Previously Microsoft has been a staunch supporter of open source, praising
it as a "cancer", a "virus" and a threat to the capitalist
economy. "
[ Reply to This | # ]
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Authored by: borneo on Friday, March 12 2004 @ 04:08 AM EST |
"When asked Thursday if Microsoft or any of its divisions had any input
into the Royal Bank of Canada portion of the PIPE deal, Microsoft spokesman
Martin told NewsForge that 'Microsoft had no involvement in that matter.'"
Was Royal Bank of canada involved in the Corel deal ?
they may have bought some junks bonds of that time
[ Reply to This | # ]
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Authored by: Anonymous on Friday, March 12 2004 @ 05:18 AM EST |
.....Somebody did another Open Letter to SCO? [ Reply to This | # ]
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Authored by: DaveWalley on Friday, March 12 2004 @ 05:31 AM EST |
The 76% figure appears to be wrong.
Recent EDGAR SC 13G/A filing here, dated 13 February 2004, shows a 5,492,834 shares owned by Canopy,
with 29,021 shares and 60,000 options held by Mr Yarro.
This appears
consistent with the statement that Canopy owns approximately 40% (in the last
10-K, which showed 13,824,000 shares issued).
The prospectus for the IPO
showed that after completion, 72.9% of the company (then Caldera Systems) would
be beneficially owned by Raymond J Noorda, of which 55.7% was via Canopy
(previously NFT Ventures Inc), the remainder being holdings via MTI and
Lineo.
This also prompts the suggestion that a privatisation-oriented
buyback at current price of $10 would be an effective reversal of the IPO,
which had a share price of $14 (effectively $56 after adjustment for the
reverse-split), and would not be helpful to the company's case in its IPO
lawsiut. [ Reply to This | # ]
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- Canopy/Yarro - Authored by: Anonymous on Friday, March 12 2004 @ 08:13 AM EST
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Authored by: ccs on Friday, March 12 2004 @ 06:06 AM EST |
When I read this, I knew i had to share the link here.
ROTFL
And here
the link: BOFH:
Protecting bodily waste in the public domain (at The Register)
CCS
[ Reply to This | # ]
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Authored by: Anonymous on Friday, March 12 2004 @ 06:11 AM EST |
This query:
http://www.whitepages.c
om/search/Find_Person?firstname_begins_with=1&firstname=M&name=Anderer&a
mp;city_zip=&state_id= lists (all?) six 'M Anderder's
prino [ Reply to This | # ]
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Authored by: Anonymous on Friday, March 12 2004 @ 06:21 AM EST |
Some more speculation in the The Salt Lake
Tribune:
SCO parent Canopy Group, and its CEO Yarro, together
own nearly 11 million, or 76 percent of SCO common shares, according to the U.S.
Securities and Exchange Commission. Knowing that, Jenson speculated the buyout
could be a precursor to taking SCO private.
The advantage for
The SCO Group will be that they no longer need to publish their results. We'll
see what happens.
H@ns [ Reply to This | # ]
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Authored by: Tsu Dho Nimh on Friday, March 12 2004 @ 06:41 AM EST |
"'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.'""
yeah, yeah ... so why are all the insider transactions reported SALES and not
PURCHASES? When a company exec sells some stock, that's OK, but when they have
ALL been selling steaqdily every time an option matures, that's a sign they
don't believe in their koolaid's advertising.
The "private" deals in the buyback could allow SCO to use the last of
their corporate cash to buy out a lot of stock from Yarro, Canopy and any other
persons they want to reward for helping them through these difficult times.[ Reply to This | # ]
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Authored by: lordmhoram on Friday, March 12 2004 @ 06:47 AM EST |
Just found a mention of a Michael Anderer, on the staff of the University of
South Carolina:
http://www.sc.edu/research/boardmember.shtml
The biog for him gives:
CEO of Bellevue, WA-based consulting firm Entirenet
Founder of The Computer Group
1998 Outstanding Young Alumnus for USC School of Engineering
B.S. in chemical engineering from USC
I wonder, could this be the same guy?
[ Reply to This | # ]
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Authored by: Anonymous on Friday, March 12 2004 @ 07:00 AM EST |
anyone else seen this article in The Australian?
Microsoft-SCO link
confirmed
"SCO Group investor Baystar Capital has confirmed that
Microsoft introduced the two companies.
Lawrence Goldfarb, managing partner
at Baystar Capital, said Microsoft senior executives phoned him last year to ask
if his company would be interested in investing in SCO"
http://www.australianit.news.com.au/articles/0,7204,8944855%5E153
16%5E%5Enbv%5E,00.html[ Reply to This | # ]
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Authored by: Anonymous on Friday, March 12 2004 @ 07:21 AM EST |
According to Bob Cringley's latest article, Bill
Gates is due in court soon to answer Burst.com's questions regarding
MS's deletion of internal email relating to MS's alleged theft of Burst's
technology.
Bob reported that he found a court document indicating a named
MS official is being cited as ordering email deletion which is something MS have
always denied.
"The implication of this document is that Burst found an e-
mail from Allchin ordering people working under him to destroy certain e-mails.
If true, this goes against Microsoft’s stated position that it leaves it up to
individual employees to decide what to erase and what to keep -- a position that
has been very useful to date because it has allowed Microsoft to lose
embarrassing e-mail pretty much with impunity."
A PDF of the document is here.
Does
anyone know anymore info on the case or where to find it? I would guess IBM,
Novell and RedHat's lawyers would all be interested in what Gates has to say. [ Reply to This | # ]
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Authored by: the_flatlander on Friday, March 12 2004 @ 07:55 AM EST |
Forgive me, please, while I think out loud, as it were, at my keyboard.
The FUD regarding our own esteemed Ms. Jones: She lives in the *same* state as
IBM, her web site is hosted by an organization that received, once upon a time,
a donation from IBM. Obviously, then, Ms. Jones is merely a proxy for IBM.
You know, that has just enough truth to be worth throwing in front of the press
in an attempt to discredit PJ. (I still haven’t figured out why an association
with IBM would mean anything, since much of what PJ does is simply to present
the facts as are otherwise available in the public records.)
Now, Microsoft, as it turns out, asked an investment company to give SCO 50
Million Dollars U.S., and this I am to take as mere coincidence? It just
happened that they asked these guys to give the SCOundrels the money. It could
just as easily have happened that they might have told them to give *me* the
money. Right. It isn’t like Microsoft is in the same state as BayStar. It
isn’t like BayStar has a web-site hosted on equipment that Microsoft might have
donated. There’s *no* obvious connection there.
Okay. Look, you have to leave some room for doubt, and uncertainty, otherwise
the whole FUD thing falls to just Fear. And that is not an effective marketing
strategy, I’m afraid.
The Flatlander
The SCOundrels can’t sell software. The SCOundrels can’t win lawsuits. The
SCOundrels can’t do FUD marketing effectively. Frankly, they are beginning to
look completely useless.
[ Reply to This | # ]
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Authored by: Anonymous on Friday, March 12 2004 @ 08:19 AM EST |
Netcraft reported 03/08 that www.sco.com is back up, after having been
deliberately taken down by SCO itself on February 2.
"www.sco.com Back
Online
The www.sco.com web site was brought back online by The SCO
Group over the weekend after an extended hiatus following the MyDoom-related
distributed denial of service (DDoS) attack on the site.
http://news.netcraft.com/archives/2004/03/08/wwwscocom_back_online.html
"
And, for those with a taste for irony:
http://uptime.netcr
aft.com/up/graph?site=www.sco.com
"The site www.sco.com is
running Apache on Linux.
Linux users include Dialtone
Apache
is also being used by Rackspace"
t_t_b
---
Mad cow? You'd be mad, too, if someone was trying to eat you. [ Reply to This | # ]
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Authored by: Anonymous on Friday, March 12 2004 @ 08:31 AM EST |
So the phone and fax on S2.com's whois is obviously fake.
Isnt that a violation of ICANN's regulations?
Not that they're even using the domain, but why hasnt NSI suspended their domain
yet?[ Reply to This | # ]
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Authored by: Anonymous on Friday, March 12 2004 @ 08:59 AM EST |
The Wall Street Journal had a very negatively biased article on Red Hat and
Linux in general.
It was a 27% empty article:
"A recent poll conducted by Gartner Group suggested that 27% of more than
100 respondants were slowing their deployment of Linux, or avoiding the
operating system, as the result of fears of litigation."
What about the 73% who are increasing or maintaining their Linux deployments.
Talk about a biased slant![ Reply to This | # ]
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Authored by: Anonymous on Friday, March 12 2004 @ 09:35 AM EST |
You guys are spilling a lot of <digital> ink speculating on why SCO is
doing this, and trying to figure out the logic behind it. You are giving them
too much credit. They may not have a strategy. Precious few businesses make
business decisions based upon thought, logical or otherwise. Most business,
large and small, make decisions based on emotion, gut "instinct", or
sheer randomness. Evidence of past behavious suggests SCO is no different.[ Reply to This | # ]
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Authored by: T. ProphetLactus on Friday, March 12 2004 @ 09:35 AM EST |
There is a Mr. Hoffa calling, with some advice for you.
An MS investment 'suggestion' is similar to a serpent's fruit recommendation, it
would seem.
TPL[ Reply to This | # ]
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Authored by: s21mag on Friday, March 12 2004 @ 10:07 AM EST |
All this sp eculationof SCOG going under has made me wonder. Assume for the
moment that they actually DO own the copyrights. Who whould then own those? In
the bankrupcy would all their assets be up for sale? Would they go to Canopy? If
so, and the object of all this is only to halt the spread of Linux,what's to
prevent them from assigning them to another of their holdings and starting this
little scenario all over again?
---
L. W. Yost
Luck is when preparation meets opportunity.[ Reply to This | # ]
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Authored by: Anonymous on Friday, March 12 2004 @ 10:08 AM EST |
I'd say the insiders are setting up to get out before the fall (in 45 days minus
however long it's been since Judge Wells' ruling) or at least to keep IBM from
doing an 'all your SCO are belong to us'[ Reply to This | # ]
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Authored by: Anonymous on Friday, March 12 2004 @ 10:12 AM EST |
If they go private they will blame Groklaw.Com for using their own words against
them. Sounds Great.[ Reply to This | # ]
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Authored by: dmscvc123 on Friday, March 12 2004 @ 10:25 AM EST |
As I recall there was so open source components found in the most recent code
leak. I forget the name of the specific program, but it was pointed out that
although it was within the license terms of that open source product to put it
in, it was unethical to use open source products in your software on one hand
but bash open source in public on the other hand.
Now since MS has never let ethics get in its way, could they have licensed Linux
source code to put into their software? Afterall, if you believe everything SCO
says about what they own and that the GPL isn't valid, etc., couldn't MS say
they were "legally" entitled to put Linux code in their products since
SCO "owns" it? That way we wouldn't see MS Linux, but rather MS
Windows stolen from Linux.[ Reply to This | # ]
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Authored by: Anonymous on Friday, March 12 2004 @ 10:31 AM EST |
From URL:
http://www.thestreet.com/_yahoo/markets/marketfeatures/10148199.html
SCO Group Likes Its Stock at These Levels
By TSC Staff
3/11/2004 11:55 AM EST
Updated from 10:02 a.m. EST
SCO Group (SCOX:Nasdaq - news - research) continued to beguile Thursday,
announcing a share buyback after a ninefold run-up in its stock price that
reflects wagering on its multimillion-dollar legal campaign to privatize Linux.
The technology outfit said it will buy back up to 1.5 million common shares over
the next 24 months, believing as it does that they are an "attractive
investment opportunity" at current levels. That level was recently $9.50,
down a penny from Wednesday night, but up from the $1.09 they touched in
February 2003.
© 1996-2004 TheStreet.com, Inc. All rights reserved.[ Reply to This | # ]
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Authored by: Anonymous on Friday, March 12 2004 @ 10:41 AM EST |
http://cma.zdnet.com/texis/techinfobase/techinfobase/+Awo_qoWKK+sX6s/cdisplay.ht
ml
After suit, McBride is out at Ikon.
By: Jerry Rosa Computer Reseller News Published 10/19/97
Abstract
Ikon Office Solutions fired executive Darl McBride less than a week after
McBride filed a $10 million suit against the company. The suit charges Ikon and
Chmn and CEO John Stuart with breach of contract and defamation of character. It
also contends that Ikon reneged on a promise to reward McBride and his
management team for assembling a huge integration unit in Utah. Ikon maintains
that McBride's firing was based on philosophical differences concerning the
strategic directions of the company's Technology Services unit. McBride built
the Technology Services unit through an 18-month acquisition spree. His firing
also resulted in the closing of the Utah office where McBride worked and the
firing of most of his nine-member support staff.
[ Reply to This | # ]
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Authored by: Anonymous on Friday, March 12 2004 @ 10:43 AM EST |
Probably inexplicably jumped out of an aircraft over the
barrens of Utah.
Bre-X.
Derek [ Reply to This | # ]
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Authored by: Anonymous on Friday, March 12 2004 @ 11:21 AM EST |
I checked into the details of the expired license for S2. Yes, Utah indicates
that S2.com corporation's license expired some time ago (late 1/18/2002).
[Search Utah business database at
https://secure.utah.gov/bes/bes
with S2 as search term]
But Anderer has another entity which is only now delinquent in licensing fees
(last renewed a year ago, 3/5/03) in Utah.
This business entity is S2 Partners LLC, 56 E. Broadway, Ste. 100, Salt Lake, UT
84111. He may be hard to find, but the corporation/LLC exists. Of note S2
Partners, LLC is Delaware based
SCO/S2 documents also indicate another name:
S2 Strategic Consuting, LLC, which is also incorporated in DE
[try DE web site and search for S2 Strategic Consulting:
https://sos-res.state.de.us/tin/controller]
S2.com also registered in DE.
Status can be found (for a $10 fee)
Where do we try to reach Anderer? DE or UT?
[ Reply to This | # ]
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Authored by: Anonymous on Friday, March 12 2004 @ 11:31 AM EST |
Two questions about numbers in the lastest Bob Mims article.
1. Damages claim against IBM: "And a potential payoff remains: SCO is
seeking up to $50 billion in damages from IBM."
If Bob likes the $50 billion amount so much (and he does!), shouldn't he express
it more like "SCO is seeking up to $5 billion in damages, and has indicated
in a comment it may seek up to $50 billion."?
2. Baystar redemption price: "The San Francisco-based hedge fund apparently
has a redemption clause that might kick in if SCO stock dips below $6.75 and
stays there for 20 consecutive trading days."
50% of the $16.93 conversion price is $8.46, not $6.75, yes?[ Reply to This | # ]
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Authored by: Anonymous on Friday, March 12 2004 @ 11:42 AM EST |
If I was a SCO employee, I would surely feel that
SCO was gambling with my job. If a company was
gambling with your future such as what SCO is doing,
how would you feel? I do not think I would maintain
any loyalty long-term.
This wreaks almost to that of Enron but not quite.[ Reply to This | # ]
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Authored by: blang on Friday, March 12 2004 @ 11:57 AM EST |
All reporters so far has failed to mention the only possible motive that makes
any sense behind this buyback.
SCOX has a lot of cash.
This cash was obtained from a private equity placement at a time when the shares
were highly valued (almost $17).
(which seems to be 100% hedged judging by the short ratio)
If SCO had tried to obtain such financing by offering shares on the open market,
it would have decimated SCO's share price to the $5-$10 level. The PIPE deal
allowed SCO to get this cash without negatively harm the share proce in the
short term.
However, all this cash is at risk.
1)Litigation cost is consuming a lot of cash.
2)SCO must pay hefty dividens on these shares.
3)SCO is being sued by Redhat, and also faces countersuit from IBM. Also, the
Novell litigation poses a near term risk that would be fatal to all other
litigaiton SCO is involved in.
Canopy holds enough shares to cash out all of the buyback, which would be worth
$25 million to Canopy.
The buyback announcement said the shares could be purchased off market.
This buyback is the only possible way for Canopy to move the PIPE cash from
SCO's accounts, to Canopy's account, and prevent the PIPE money from being lost
in litigation.
Time is also of the essence. The share price is hovering close to the redemption
price. If redemtion is triggered, all of SCO's cash will be paid back to the
PIPE investors.
So this buyback is all about 1 thing:
Survival in the short term, long enough for Canopy to take over SCO's cash.
It would be interesting to know what RBC and Baystar thinks about this. It is
very likely that they are 100% hedged, in which case, the following will be the
math at the end of the day:
Winner: Canopy. Managed to get $25 million out of a company worth virtually
nothing.
Neutral: Baystar/RBC. Stand to lose most of their investment, but is likely
hedged so that they end up with a small profit.
Losers: Retail investors and institutional investors who were not hedged.
[ Reply to This | # ]
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Authored by: Peter Simpson on Friday, March 12 2004 @ 12:02 PM EST |
Found this while Googling for S2 Strategic Consulting.
Appears to be the contract between Anderer and SCO, used as an example of a
contract?
http://contracts.onecle.com/sco/s2.warrant.2003.07.01.shtml[ Reply to This | # ]
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Authored by: lordmhoram on Friday, March 12 2004 @ 12:05 PM EST |
Why does this word "incubator" keep popping up on web pages which
mention Mike Anderer? I've never come across it in anything other than the
neonatal context before!
Look at these two extracts: (from
http://www.medicity.com/infosite/second/news/html/article_00_0313.htm
"Medicity has set up shop at 56 E. Broadway, and Philadelphia-based Silocon
Stemcell plans to open a high-tech incubator at the same building, in which it
will have part ownership and is set to close on this week, according to James
"Kipp" Lassetter, CEO of Medicity and a friend of Silicon Stemcell's
Mike Anderer, who will run the incubator."
And later:
'"Mike plans on taking down more real estate and growing a huge ability to
create value in companies, because basically what an incubator does is take
three guys and an idea and put seed funding, give them office space,
network."'
Doubly weird, given the genuinely medical context of this page.
[ Reply to This | # ]
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Authored by: JustFree on Friday, March 12 2004 @ 12:14 PM EST |
It is strange that Santa Cruz Sentinel would report on SCO buyback program and
the stock quotes are all wrong. It is kind of ammusing, but really strange.
"In the last 52 weeks, shares have traded between $8.75 and
$31.35."[ Reply to This | # ]
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Authored by: Anonymous on Friday, March 12 2004 @ 12:20 PM EST |
Not sure wether this matters, but it is at least some more info about
BS.
"[...]
BayStar was overigens ook een van de
investeringsbedrijven die destijds betrokken waren bij de beursgang van World
Online. Nina Brink verkocht onder meer aan BayStar een grote hoeveelheid
WOL-aandelen voor zes euro per stuk.
Deze deal stond echter niet in
het prospectus vermeld, maar werd ontdekt voordat WOL definitief naar de beurs
ging. Om de beursgang zelf niet uit te stellen, besloot Brink af te zien van
haar verwachte winstdeling. Hierdoor zag zij bijna 55 miljoen euro (destijds 120
miljoen gulden) aan haar neus voorbij gaan."
Rough
translation:
BayStar was btw also one of the investor companies
which was involved with the going to the change of World Online. Nina Brink [CEO
WOL] sold including to BayStar a big amount of WOL-shares for 6 EUR per
share.
This deal was however not mentioned in the prospectus, but was
discovered before WOL went definite to the change. In order to not delay the
going to the change, Brink decided to pass her expected profit-sharing. Because
of this, she saw 55 milion EUR (at that time 120 milion guilder) passing her
nose.
Source (in Dutch):
http://www.webwereld.nl/nieuws/18012.phtml
This happened in The
Netherlands and something important isn't noticed here because it is widely
known and history; ie. not news. IIRC Brink wasn't convicted of a crime but you
better believe she's hated by the people who bought her shares, and who she
seemed to have betrayed, including her damn employers![ Reply to This | # ]
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- Beursgang - Authored by: Anonymous on Friday, March 12 2004 @ 04:45 PM EST
- Beursgang - Authored by: Anonymous on Friday, March 12 2004 @ 06:00 PM EST
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Authored by: Anonymous on Friday, March 12 2004 @ 12:25 PM EST |
Todd Bishop, a reporter for the Seattle PI, has a quite informative Friday
story with more on the dealings between Microsoft and Baystar. It's at:
http://seattlepi.nwsource.com/business/164447_msftsco12.html
The legal experts he interviewed did not seem to think that Microsoft's
role in the financing would break antitrust laws, unless it
threatened to harm Baystar if it did not make the investment.
Translation: Bribes to others so they destroy your competitors is OK,
but bullying them isn't. Not very good law.
Ironically, that drives home the point that Microsoft is not merely a
technical monopoly due to it's 90+% market share, but precisely the sort
of ever-predatory monopoly that antitrust laws are intended to
muzzle. The late 19th to early 20th century steel, oil and rail trusts were
notorious for employing clever lawyers and exploiting loopholes in the
law.
In the case of perhaps the worst of the lot, John Rockefeller's
Standard Oil, in the end the only solution that worked was to break it up
into 17 competitors who turned their ruthlessness on each other.
Rockefeller never got the message that his behavior was wrong. Gates &
Co. seem to suffer from a similar problem. Right and wrong always
translates into whether they will be punished or not.
At best BayStar will come out of this looking not very bright and more
than a little nasty. They justified their investment in SCO based on its
"cash flow and intellectual property." Its cash flow was never good
and is
now negative, while its ownership of Unix copyrights is contested by
Novell. Really dumb.
And open source supporters should not forget that if BayStar really
thought it could make money off SCO (rather than from Microsoft
paybacks), then it hoped to do so by trashing Linux and open source by
burdening it with huge license fees. If so, it ranks among the
"bad guys" with SCO and Microsoft. If the money they put in SCO does
prove a bad investment, it might be good to make sure the
investment industry never forgets that.[ Reply to This | # ]
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Authored by: dmscvc123 on Friday, March 12 2004 @ 12:34 PM EST |
From a Salt Lake Tribune article talking about a patent assigned to Anderer
(among others):
"Method for managing printed medium activated revenue sharing domain name
system schemas, patent No. 6,546,418, invented by Robert J. Schena of Wayne,
Pa., Mike Anderer of Salt Lake City, Peter B. Ritz of Meadowbrook, Pa., and Mike
Bernstein of Tucson, Ariz., assigned to AirClic Inc. of Blue Bell, Pa."
http://www.sltrib.com/2003/Apr/04142003/monday/47686.asp
Now AirClic is a viable company and it turns out the co-founder used to work for
Anderer:
http://www.airclic.com/about/about_management.html#ritz
Also it turns out that Silicon Stemcell is an investor in AirClic according to
the website.
Here's another connection between Silicon Stemcell and AirClic via this company
called DBAC:
http://www.futurevision.com/history.html
Also I found this old article on IKON where it interviews both Anderer and
McBride when they were VPs:
http://www.iweek.com/650/50iuun4.htm
Here's another thing on Silicon Stemcell/Anderer saying that they'll be in the
same Salt Lake building as Medicity:
http://www.medicity.com/news_ent1.htm
Also this explains why S2 is called S2 - S1 is another name for Silicon
Stemcell:
http://www.smartben.com/sbmk/SBMK.doc[ Reply to This | # ]
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Authored by: Anonymous on Friday, March 12 2004 @ 01:16 PM EST |
Agent Smith voiceover "What good would contact do, Mr. Anderer, if you are
unable to speak..."[ Reply to This | # ]
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Authored by: Anonymous on Friday, March 12 2004 @ 02:21 PM EST |
Or is he some alias for a go between from SCO to MS? It
isn't hard to set up a fake company. [ Reply to This | # ]
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Authored by: Anonymous on Friday, March 12 2004 @ 02:51 PM EST |
Mystery S2 middleman has surfaced to talk to NewsForge.
He does a lot of
mincing around, claims he can't talk about the PIPE deal, and goes on at length
to try and show what an evenhanded, pragmatic guy he is.
I'm frankly too
tired to try and thresh and winnow his meandering comments, but I will say that
I found the very nature of his writing to be evasive, cryptic and downright
eye-glazingly boring in its incoherent, rambling style.
Somebody who has had
more sleep should have fun with this. One comment seemed to be aimed at
suggesting that there are evil trolls on his trail - something about signing on
as a child to exploit privacy laws. That one penetrated the fog.
Summary:
Sounds like a fast talking grifter backing away from an angry
mark.
Thanks again, the actual Tim Ransom, presently not logged
on (more on that another time)[ Reply to This | # ]
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Authored by: m_si_M on Friday, March 12 2004 @ 04:03 PM EST |
heise.de reports another possible SCO-M$-connection:
[http://www.heise.de/newsticker/meldung/45496]
Gregory Blepp, vice president SCOSource will make a speech at CeBIT in the name
of dmmv. SCO is a member of the German multimedia association (dmmv), an
organisation that speaks out for strengthening IP and DRM in Germany.
This is what Heise wrote:
"Here's a delicate connection as well: Rudolf Gallist, dmmv vice president,
who was manager of German Microsoft GmbH from 1991 until 2000, is said to have
stood up for the appointment of Blepp [Blepp will take a leading position in
dmmv]. A member of dmmv describes the sign given, with a SCO Group top executive
in the "association of digital economy", as dmmv characterizes itself,
"very awkward". Another member held the counterposition: "It is a
sign for German software industry, that intellectual property of others has to
be respected." SCO's immediate counterparts won't be very interested in the
matter: IBM left the association, Novell is no member"
---
C.S.[ Reply to This | # ]
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Authored by: Kevin Snodgrass on Friday, March 12 2004 @ 06:34 PM EST |
Bob Mims of the Salt Lake Tribune dangles another possible motive for the
buyback in front of us:
"SCO parent Canopy Group, and its CEO Yarro,
together own nearly 11 million, or 76 percent of SCO common shares, according to
the U.S. Securities and Exchange Commission. Knowing that, Jenson speculated the
buyout could be a precursor to taking SCO private."
Going private would, of
course, mean no more SEC filings would be required. Can that 76% figure really
be accurate?
No, the 76% figure is incorrect. Mr. Mims needs to learn
how to read financial statements. From sec.gov, about half way down in the section "SECURITY OWNERSHIP
OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT":
[major snippage of unneeded
info, check the above link if you are curious about the accuracy of this
info]
Name # of Shares % of
Class
Principal Stockholders:
The Canopy Group, Inc.
5,492,834 38.7 %
..snippage...
Named Executive Officers And
Directors:
Ralph J. Yarro III 5,614,355(1) 39.5
%
Then read the notes, especially note 1 since it refers to Yarro.
(That's the (1) right after the number of shares listed for him)
Consists
of options to purchase 82,500 shares of common stock, 10,000 shares of common
stock acquired through an open-market purchase, 175 shares of common stock,
28,846 shares of common stock received for service on the Board, and 5,492,834
shares of common stock held by The Canopy Group. Mr. Yarro is the President and
Chief Executive Officer of The Canopy Group. Mr. Yarro disclaims beneficial
ownership of the shares held by The Canopy Group except to the extent of his
pecuniary interest therein.
Notice it says his reported beneficial
ownership number includes the 5.4+ million shares held by Canopy. That is the
number reported at the beginning for Canopy. Add that number with the options
(82,500), open market purchase(s) (10,000), common stock otherwise owned (175),
and shares received for being on the board (28,846) and you get 5,614,355, the
number listed as beneficially owned by Yarrow.
What Mims did was add the
Canopy shares with the Yarro shares to get to this 76% control number. He is
adding the Canopy shares twice, since these shares are listed twice and Mims
doesn't read (or doesn't understand) the notes.
BTW PJ, you rock!!
[ Reply to This | # ]
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Authored by: editingwhiz on Friday, March 12 2004 @ 07:27 PM EST |
Mike Anderer sent NewsForge his response Friday morning, saying as much as he
could about Microsoft, SCO and IP licensing while under NDA. It's the lead story
today on http://newsforge.com.
/cp [ Reply to This | # ]
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