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| SCO's 10Q |
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Thursday, March 18 2004 @ 04:03 PM EST
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SCO's most recent 10Q is filed, and as usual, you have to read their filing very carefully. I'll show you what I mean.
LAWSUITS Here is how they describe the IBM lawsuit, beginning on page 12, and I've marked the salient issues in blue: "On or about March 6, 2003, we filed a complaint against IBM. This action is currently pending in the United States District Court for the District of Utah, under the title The SCO Group, Inc. vs. International Business Machines Corporation, Civil No. 2:03CV0294. The complaint includes claims for breach of contract, misappropriation of trade secrets, tortious interference, and unfair competition. The complaint also alleges that IBM obtained information concerning the UNIX source code and derivative works from us and inappropriately used and distributed that information in connection with its efforts to promote the Linux operating system. As a result of IBM’s breach of contract and unfair competition and the marketplace injury sustained by us, we are requesting damages in an amount to be proven at trial, but no less than $1 billion, together with additional damages through and after the time of trial. On or about June 13, 2003, we delivered to IBM a notice of termination of IBM’s UNIX license agreement with us that underlies IBM’s AIX software.
"On or about June 16, 2003, we filed an amended complaint in the IBM case. The amended complaint essentially restates and re-alleges the allegations of the original complaint and expands on those claims in several ways. Most importantly, the amended complaint raises new allegations regarding IBM’s actions and breaches through the products and services of Sequent Computer Systems, Inc. (“Sequent”), which IBM acquired. We allege that IBM breached the Sequent agreement in several ways similar to those set forth above and we seek damages for those breaches. We are also seeking injunctive relief on several claims.
"IBM has filed a response and counterclaim to the complaint, including a demand for a jury trial. We have filed an answer to the IBM counterclaim denying the claims and asserting affirmative defenses.
"In its counterclaim, as amended on September 25, 2003, IBM asserts that we do not have the right to terminate its UNIX license or assert claims based on our ownership of UNIX intellectual property against them or others in the Linux community. In addition, IBM asserts we have breached the GNU General Public License and have infringed certain patents held by IBM. IBM’s counterclaims include claims for breach of contract, violation of the Lanham Act, unfair competition, intentional interference with prospective economic relations, unfair and deceptive trade practices, promissory estoppel, copyright infringement and patent infringement. Discovery is ongoing in the case. We intend to vigorously defend these counterclaims.
"On February 4, 2004, we filed a motion for leave to file amended pleadings in the case proposing to amend our complaint against IBM and to modify our affirmative defenses against IBM’s counterclaims. On February 25, 2004, the court granted our motion for leave. The second amended complaint, which was filed on February 27, 2004, alleges nine causes of action that are similar to those set forth above, adds a new claim for copyright infringement and removes the claim for misappropriation of trade secrets. IBM has not yet responded to the second amended complaint." Notice anything missing? How about Novell asserting that it has overruled SCO's "termination" of IBM's AIX license? Think that might be relevant to a shareholder? As for the rest, the positive spin is remarkable. Not a word about the discovery order requiring them to identify the allegedly infringing code prior to receiving AIX, something their lawyer said in open court they are not able to do, and they don't mention that the motion the court "granted" wasn't opposed. If you were not following the case closely, you'd almost think they were winning. They do mention the Novell matter, but not until page 40: "As a further response to our SCOsource initiatives and claim that our UNIX source code and derivative works have inappropriately been included in Linux, Novell has publicly asserted its belief that it owns certain copyrights in our UNIX source code, and it has filed 15 copyright applications with the United States Copyright Office related to UNIX. Novell also claims that it has a license to UNIX from us and the right to authorize its customers to use UNIX technology in their internal business operations. Specifically, Novell has also claimed to have retained rights related to legacy UNIX SVRx licenses, including the license with IBM. Novell asserts it has the right to take action on behalf of SCO in connection with such licenses, including termination rights. Novell has purported to veto our termination of the IBM, Sequent and SGI licenses. We have repeatedly asserted that we obtained the UNIX business, source code, claims and copyrights when we acquired the assets and operations of the server and professional services groups from The Santa Cruz Operation in May 2001, which had previously acquired all such assets and rights from Novell in September 1995 pursuant to an asset purchase agreement, as amended." Do you find that an accurate and complete description of what happened, namely that Novell sent SCO letters vetoing SCO's terminations? To me it sounds more like they want you to think that Novell made some public comments and said they had the right to veto but it leaves unclear what, if anything, they actually did about it ("purported to veto").
THE CONVERSION
There is, of course, plenty about the conversion, and again, I have marked in blue the parts that answer the questions I have seen asked most frequently: "On October 16, 2003, the Company issued 50,000 shares of its redeemable Series A Convertible Preferred Stock (the “Series A”) for $1,000 per share. The net proceeds from the sale of the Series A were $47,740,000. The value of the Series A is classified outside of permanent equity because of certain redemption features that are outside the control of the Company. As described in Note 10, on February 5, 2004, all outstanding Series A shares were exchanged for shares of the Company’s redeemable Series A-1 Convertible Preferred Stock and, as a result, no Series A shares remain outstanding as of February 5, 2004.
"The terms of the Series A include a number of redemption provisions that represent a derivative financial instrument under SFAS No. 133, 'Accounting for Derivative Instruments and Hedging Activities.' The Company determined that the conversion feature to allow the holders of the Series A to acquire common shares was an embedded derivative that does not qualify as a scope exemption under the provisions of EITF 00-19, 'Accounting for Derivative Financial Instruments Indexed to, and Potentially Settled in a Company’s Own Stock.' This required the Company to record at fair value and mark-to-market the fair value of the derivative. Changes in the fair value of the derivative are recorded in the Company’s statement of operations. As of October 16, 2003, the Company, through the assistance of an independent valuation firm, determined the initial fair value of the derivative was $18,069,000. As of October 31, 2003, the fair value of the derivative was $15,224,000 and the decrease in fair value of $2,845,000 was recorded as other income in the statement of operations for fiscal year 2003.
"As of January 31, 2004, the fair value of the derivative was $11,600,000, and the decrease in fair value of $3,624,000 was recorded as other income in the statement of operations for three months ended January 31, 2004. Assumptions used to value the derivative as of January 31, 2004 included a term of three years, fair value of common stock of $14.37 and an interest rate for similar securities of 15 percent.
"Dividends will be paid after the first anniversary of the closing and will be paid quarterly at a rate of 8 percent per annum, subject to annual increases of 2 percent per annum, not to exceed
12 percent per annum. The Company has the option of paying dividends in cash or shares of the Series A, subject to certain limitations. Because dividends are not payable during the first year the Series A is outstanding, the Company has accrued dividends of $756,000 for three months ended January 31, 2004, which reduced earnings to common stockholders. These dividends are in addition to $123,000 in accrued dividends recorded in fiscal year 2003.
"Subject to certain limitations, each holder of the Series A will have the right to convert, at the option of the holder, at any time, into shares of the Company’s common stock at a stated conversion price of $16.93 per share, subject to stock splits, stock dividends or other occurrences. The Company has the ability to force conversion of the Series A at any time the Company’s common stock price exceeds 150 percent of the then prevailing conversion price per share for 20 consecutive trading days, provided the Company satisfies certain other requirements.
"The Company was required to file a registration statement on Form S-3 covering the resale of the shares of common stock issuable upon conversion of the Series A. This registration statement was declared effective by the Securities and Exchange Commission on February 25, 2004. . . .
"In addition to receiving fees at reduced hourly rates, the Company’s agreement with the law firms provides that the law firms will receive a contingency fee of 20 percent of the proceeds from specified events related to the protection of the Company’s intellectual property rights. These events may include settlements, judgments, licensing fees, subject to certain exceptions, and a sale of the 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. Additionally, the Company’s agreement with the law firms may also be construed to include contingency fee payments in connection with the Company’s issuance of equity securities. Future payments payable to the law firms under this arrangement may be significant. . . . "The holders of shares of redeemable Series A-1 Convertible Preferred Stock have preferential redemption rights and rights upon liquidation that could adversely affect the holders of our common stock.
On October 16, 2003, we completed a $50,000,000 private placement of 50,000 shares of our redeemable Series A Convertible Preferred Stock and received net proceeds of approximately $47,740,000. On February 5, 2004, we completed an exchange transaction in which each outstanding share of redeemable Series A Convertible Preferred Stock was exchanged for one share of our new redeemable Series A-1 Convertible Preferred Stock.
"If the holders of shares of redeemable Series A-1 Convertible Preferred Stock choose not to convert their shares, then, they will be entitled to require us to repurchase for cash all the shares of redeemable Series A-1 Convertible Preferred Stock held by them at a premium price if any of several redemption trigger events occurs. These redemption provisions, if triggered, would require us to redeem the then-issued and outstanding shares of our redeemable Series A-1 Convertible Preferred Stock for cash.
"Additionally, the Certificate of Designation for the redeemable Series A-1 Convertible Preferred Stock provides that the number of shares of our common stock issuable upon the conversion of shares of redeemable Series A-1 Convertible Preferred Stock is limited to 2,863,135 shares in the aggregate, notwithstanding that the holders of shares of redeemable Series A-1 Convertible Preferred Stock may otherwise be entitled to receive more shares of common stock upon conversion based on the applicable conversion price. If the number of shares of common stock issuable to the holders of shares of redeemable Series A-1 Convertible Preferred Stock upon conversion is limited in this manner, then we may be required by the holders of such shares to redeem for cash the number of shares of redeemable Series A-1 Convertible Preferred Stock that were not issuable upon conversion as a result of such limits on conversion. If we were required to pay cash to the holders of shares of our redeemable Series A-1 Convertible Preferred Stock for any reason, it could have a material impact on our liquidity, which may require us to obtain additional sources of cash to sustain operations and may negatively impact the holders of our common stock.
"Further, the holders of shares of our redeemable Series A-1 Convertible Preferred Stock will be entitled to receive a preferential distribution of our assets prior to any distribution to our holders of common stock upon a liquidation, dissolution, winding up or other change in control transaction in which we sell all or substantially all our assets or merge or consolidate or otherwise combine with another company or entity. Upon the occurrence of a liquidation event, the holders of redeemable Series A-1 Convertible Preferred Stock will be entitled to receive the greater of: -
the value of the shares of redeemable Series A-1 Convertible Preferred Stock held by them determined by multiplying the closing sale price of our common stock on the Nasdaq SmallCap Market on the date of the liquidation event by the number of shares of common stock into which the preferred shares could be converted at the time of the liquidation event; or
-
up to $50,000,000, the aggregate purchase price paid by the investors in our October 2003 redeemable Series A Convertible Preferred Stock private placement, plus eight percent of that amount less the amount of any dividends paid to the preferred stockholders in the calendar year in which the liquidation event occurs.
"Depending on the amount of assets we have available for distribution to stockholders upon a liquidation event when shares of redeemable Series A-1 Convertible Preferred Stock remain outstanding, we may be required to distribute all such assets or a portion of such assets that exceeds the preferred stockholders’ pro rata ownership of our common stock assuming full conversion of their preferred shares into common stock, which could eliminate or limit the assets available for distribution to our common stockholders. Our potential obligation to pay to the law firms representing us in our efforts to establish our intellectual property rights a contingent fee of 20 percent of the proceeds we receive from a sale of our company, subject to certain limitations, could also contribute to eliminating or limiting the assets available for distribution to our common stockholders."
CASH FLOWS FROM INVESTING ACTIVITIES
Comparing this quarter with the corresponding quarter of 2003, SCO
spent $350,000 investing in "non-marketable securities" in 2003,
presumably some kind of investment. They
neither bought nor sold any regular stock, which
would constitute "available-for-sale securities," I'm told.
In Q1 of 2004, the picture changes radically. No investment
in non-marketables, but $4 million spent buying stock, and $1.3 million
cash realized selling stock. A net cash drain. It raises the question, what stock was SCO buying and selling
that quarter?
Remember this is for Q1/04, *before* the buyback.
SCOSOURCE MONIES
It's good to keep clear that their definition of SCOsource includes monies from licenses for UNIX products and services, not just IP compliance licenses. Widespread reports that they realized $20,000 this last quarter from IP compliance licenses are probably accurate, because they had no UNIX license money this quarter, that we know of. The BBC, for example, reported the $20,000 as IP compliance license money: "By contrast SCO has only won $20,000 in licence payments for its disputed intellectual property." We all did, because Robert Bench in the teleconference said that was what it was: "Our first-quarter revenue was $11.4 million, primarily attributed to our UNIX products and services. Revenue from our SCOsource division relating to compliance licenses was $20,000. Our SCOsource initiatives are continuing as planned, and we expect SCOsource related revenue will gain traction this quarter and continue to increase momentum in future quarters." But when you look at the 10Q, you notice that the way they define SCOsource, it also means money from Unix licenses, such as the payments from MS and Sun:
"The Company’s SCOsource licensing revenue to date has been generated from license agreements to utilize the Company’s UNIX source code as well as from intellectual property compliance licenses. The Company recognizes revenue from SCOsource licensing agreements when a signed contract exists, the fee is fixed and determinable, collection of the receivable is probable and delivery has occurred. If the payment terms extend beyond the Company’s normal payment terms, revenue is recognized as the payments are received." This quarter, so far as we know, there was no UNIX licensing money, so likely it was compliance loot. But with SCO, it's worthwhile to look at every detail carefully.
SIGNIFICANT CUSTOMER - TECH DATA
There is one detail that I can't explain. In section 8, Significant Customers, SCO lists Tech Data as making up about 10% of their income. I wrote to Tech Data but have not received a reply. What I wonder about, since Tech Data has been associated with Caldera since at least 2000, (they did Linux training classes with them), is whether this means they have increased their ties with SCO or whether SCO's income has gone down sufficiently that they now make up 10%. Here is the info from the 10Q: "(8) SIGNIFICANT CUSTOMERS
"During the three months ended January 31, 2004, Tech Data Corporation accounted for approximately 10 percent of total revenue. During the three months ended January 31, 2003, the Company did not have any customers that accounted for more than 10 percent of total revenue." Here is how Tech Data describes itself in a press release about a deal they did with Sun: "About Tech Data
"Tech Data Corporation (NASDAQ/NMS: TECD), founded in 1974, is a leading global provider of IT products, logistics management and other value-added services. Ranked 117th on the Fortune 500, the company and its subsidiaries serve more than 100,000 technology resellers in the United States, Canada, the Caribbean, Latin America, Europe and the Middle East. Tech Data’s extensive service offering includes pre- and post-sale training and technical support, financing options and configuration services as well as a full range of award-winning electronic commerce solutions. The company generated sales of $15.7 billion for its most recent fiscal year, which ended January 31, 2003." GERMANY Here is what the 10Q says about Germany, and it doesn't match the Computerwoche report: "Several entities in Germany have obtained temporary restraining orders in Germany precluding our German subsidiary, from making statements in Germany that, in substance, disparage Linux, or entities involved in the Linux industry, or implicate Linux as infringing our intellectual property rights. SCO GmbH has received an administrative fine of 10,000 Euros for a technical violation of one of the temporary restraining orders. We are currently negotiating with the various claimants in Germany over the temporary restraining orders and our options regarding these matters. Informal complaints similar to those raised in Germany have been received from companies in Austria and Poland. We have responded to those complaints. It is not known if those complainants will take future action." COMPETITORS Then there is this funny bit of wordsmithing: "In the UNIX operating system market, our competitors include IBM, Hewlett-Packard, Sun, Microsoft and Linux distributors." You wouldn't want to say "Red Hat" here, because the judge in Delaware might read this and get ideas about whether or not certain threats were aimed at certain Linux distributors who really were competitors of SCO. DEPENDENCE ON DEVELOPERS There is one sentence in their 10Q that is absolutely true: DEPENDENCE ON DEVELOPERS "The success of our UNIX business will depend on the level of commitment and certification we receive from industry partners and developers. In recent years, we have seen hardware and software vendors as well as software developers turn their certification and application development efforts toward Linux and elect not to continue to support or certify to our UNIX operating system products. If this trend continues, our competitive position will be adversely impacted and our future revenue from our UNIX business will decline." If developers, and that means coders, don't like you or your product, they won't work with you or for you, and then what will you do? It's something a company planning to stay in the software business would be expected to consider before attacking the GPL.
REGULATORS
Finally, there is this prophetic statement: "In addition to these above-mentioned actions, other regulators or others in the Linux community may initiate legal actions against us, all of which may negatively impact our operations or future operating performance." It's been hinted in the media that the FTC and the SEC are already investigating. If they are, you'd expect the filing to say so. Since there isn't any word about it, I presume they are now on the record that no such investigations are currently known to them.
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| Authored by: PJ on Thursday, March 18 2004 @ 04:14 PM EST |
| Please record my mistakes for posterity here, so I can find them quickly. [ Reply to This | # ]
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| Authored by: PJ on Thursday, March 18 2004 @ 04:15 PM EST |
Please put updates and news here in this thread, so everyone can find them
readily. Thank you.[ Reply to This | # ]
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- Updates, News, URLs Here pls. - Authored by: Anonymous on Thursday, March 18 2004 @ 04:23 PM EST
- Updates, News, URLs Here pls. - Authored by: Anonymous on Thursday, March 18 2004 @ 04:25 PM EST
- Updates, News, URLs Here pls. - Authored by: Avenger on Thursday, March 18 2004 @ 04:28 PM EST
- Laughing so hard I have tears in my eyes - Authored by: Anonymous on Thursday, March 18 2004 @ 04:38 PM EST
- Updates, News, URLs Here pls. - Authored by: DannyB on Thursday, March 18 2004 @ 04:56 PM EST
- Very funny guy. - Authored by: Fredric on Thursday, March 18 2004 @ 05:31 PM EST
- Updates, News, URLs Here pls. - Authored by: haegarth on Thursday, March 18 2004 @ 05:57 PM EST
- Updates, News, URLs Here pls. - Authored by: Anonymous on Thursday, March 18 2004 @ 04:56 PM EST
- Updates, News, URLs Here pls. - Authored by: mikebmw on Thursday, March 18 2004 @ 05:14 PM EST
- Updates, News, URLs Here pls. - Authored by: Anonymous on Thursday, March 18 2004 @ 05:40 PM EST
- Today's close: $8.75... - Authored by: Anonymous on Thursday, March 18 2004 @ 10:01 PM EST
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| Authored by: Groo on Thursday, March 18 2004 @ 04:22 PM EST |
If the SEC has an investigation started, can they ask the company to keep it
quiet, or is it mandatory to publish the info? What I am getting at is, is there
a diference between the SEC looking into something, and actual charges filed WRT
disclosure?
-Charlie[ Reply to This | # ]
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- SEC - Authored by: Nivuahc on Thursday, March 18 2004 @ 04:31 PM EST
- SEC - Authored by: Anonymous on Thursday, March 18 2004 @ 04:34 PM EST
- SEC - Authored by: nzkoz on Thursday, March 18 2004 @ 04:59 PM EST
- SEC - Authored by: Anonymous on Thursday, March 18 2004 @ 05:15 PM EST
- No acknowledgement required until enforcement - Authored by: Anonymous on Thursday, March 18 2004 @ 05:05 PM EST
- SEC - Authored by: Anonymous on Thursday, March 18 2004 @ 05:49 PM EST
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| Authored by: martimus on Thursday, March 18 2004 @ 04:28 PM EST |
You have hilited numerous items that might be used to start an SEC
investigation, if one is not already underway. I am amazed that, given the
publicity to date, SEC action is not already obvious. [ Reply to This | # ]
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| Authored by: Peter H. Salus on Thursday, March 18 2004 @ 04:30 PM EST |
Pamela,
This is a superb job! It's of real interest to note
that *none* of the "free" Unices, FreeBSD, OpenBSD,
NetBSD, are "competitors." Nor are any of the non-RH
Linux vendors, nor the FSF. In fact, if the stock
holders are so stupid as to believe what's written in
the 10Q, they deserve the shares. It will be interesting
to see whether Novell, RH, IBM, AZ, or DC introduce the
10Q in their respective cases. SCO would have a really
difficult time objecting...
P
---
Peter H. Salus[ Reply to This | # ]
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| Authored by: sam on Thursday, March 18 2004 @ 04:31 PM EST |
Just so you know, when the SEC opens an investigation, they do not disclose the
fact to anyone including the target of the investigation. It's pretty close to
lock down secrecy.
---
Don't forget. IAAL. (I am a layman.)[ Reply to This | # ]
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- SCO's 10Q - Authored by: Anonymous on Thursday, March 18 2004 @ 05:26 PM EST
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| Authored by: dmscvc123 on Thursday, March 18 2004 @ 04:31 PM EST |
I remember reading in one of the business magazines about how companies should
use their insider industry knowledge (like if IBM knew it was about to hook a
huge customer) to profit by either shorting their competitor's stocks or buying
up their own. However, SCO is doing the reverse of this by shorting their own
stock. Is that legal? Is that ethical? I just wish I could remember the article
I read since as I recall the article said doing something like what SCO is doing
is both illegal and unethical.[ Reply to This | # ]
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- Legality/Ethics - Authored by: Anonymous on Thursday, March 18 2004 @ 04:38 PM EST
- Legality/Ethics - Authored by: dbc on Thursday, March 18 2004 @ 04:59 PM EST
- Legality/Ethics - Authored by: Anonymous on Thursday, March 18 2004 @ 05:04 PM EST
- SCO Shorting Own Stock - Authored by: dmscvc123 on Thursday, March 18 2004 @ 05:16 PM EST
- The PIPE - Authored by: Anonymous on Thursday, March 18 2004 @ 05:30 PM EST
- The PIPE - Authored by: dmscvc123 on Thursday, March 18 2004 @ 05:35 PM EST
- The PIPE - Authored by: Anonymous on Thursday, March 18 2004 @ 05:59 PM EST
- The PIPE - Authored by: Ruidh on Thursday, March 18 2004 @ 11:37 PM EST
- Um, insider trading? - Authored by: Anonymous on Thursday, March 18 2004 @ 05:28 PM EST
- Legality/Ethics - Authored by: Anonymous on Thursday, March 18 2004 @ 07:24 PM EST
- Legality/Ethics - Authored by: Anonymous on Friday, March 19 2004 @ 03:52 PM EST
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| Authored by: Anonymous on Thursday, March 18 2004 @ 04:33 PM EST |
"In the UNIX operating system market, our competitors include IBM,
Hewlett-Packard, Sun, Microsoft and Linux distributors."
Really? I don't see any Microsoft UNIX. I see lots of stuff that helps you
migrate from UNIX to Windows. Is that a UNIX O/S market?
[ Reply to This | # ]
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- Microsoft ? - Authored by: Anonymous on Thursday, March 18 2004 @ 04:45 PM EST
- Microsoft ? - Authored by: iron_chef on Thursday, March 18 2004 @ 04:47 PM EST
- Microsoft ? - Authored by: ihawk on Thursday, March 18 2004 @ 08:03 PM EST
- Microsoft ? - Authored by: TomWiles on Friday, March 19 2004 @ 03:02 PM EST
- Microsoft ? - Authored by: Anonymous on Monday, March 22 2004 @ 12:35 AM EST
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| Authored by: Anonymous on Thursday, March 18 2004 @ 04:34 PM EST |
Haha,
beeing german and all, I can't see how their statement about Germany is even
close in describing what they are up against in Germany.
The way I understand this in short, they have one order for all of germany to
put up or shut up. So I would expect to see this in similar wording in their
filing and not a shmoo shmoo of 'some' entities.
It sounds like they are allowed to sue 'other' entities in Germany, which they
can not ![ Reply to This | # ]
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- SCO's 10Q - Authored by: Anonymous on Thursday, March 18 2004 @ 06:08 PM EST
- SCO's 10Q - Authored by: m_si_M on Thursday, March 18 2004 @ 08:23 PM EST
- SCO's 10Q - Authored by: Anonymous on Thursday, March 18 2004 @ 10:50 PM EST
- SCO's 10Q - Authored by: Anonymous on Friday, March 19 2004 @ 05:49 AM EST
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| Authored by: rand on Thursday, March 18 2004 @ 04:39 PM EST |
On their website, TechData has no listing of The SCO Group; they do list Santa
Cruz Organization and Caldera Systems as suppliers.
---
carpe ductum -- "Grab the tape" (IANAL and so forth and so on)[ Reply to This | # ]
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| Authored by: DannyB on Thursday, March 18 2004 @ 04:40 PM EST |
There is one sentence in their 10Q that is absolutely true
You
failed to state whether this was an increase or decrease from the last 10Q.
Sorry, I'm now confused.---
The price of freedom is eternal litigation. [ Reply to This | # ]
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| Authored by: Peter H. Salus on Thursday, March 18 2004 @ 04:48 PM EST |
According to Moody (Rebel Code, 2001, p. 99), "Caldera
was set up in 1994." Linus (Just For Fun, 2001) has the
same year. I know that Bryan Sparks was CEO of Caldera
in 1996. Why does SCO's 10Q give a date in 1998? Please
explain, someone.
---
Peter H. Salus[ Reply to This | # ]
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| Authored by: kberrien on Thursday, March 18 2004 @ 04:48 PM EST |
"..and Linux distributors."
You wouldn't want to say "Red
Hat" here, because the judge in Delaware might read this and get ideas about
whether or not certain threats were aimed at certain Linux distributors who
really were competitors of SCO.
Redhat IS a linux distributor.
They are the biggest US distributor. QED.
Where is the judge in
Delaware? You can tell Judges are not pressured by getting into the press - 2
weeks ago would have been the oportune time to hand out the motion.[ Reply to This | # ]
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| Authored by: LionKuntz on Thursday, March 18 2004 @ 04:57 PM EST |
http://ecosyn.us/746patent/Smo
kingGun.html
Follow the links. The excerpts in bold are bolded in the
webpage citations to spot them in larger context. There are links to the
webpages which were available online on March 17th, 2004. Go to the original
documents for additional verification. There is not a shadow of a doubt that
UNIX Trade Secrets were kaput as fast as they were created at least through UNIX
32V. There are admissions in court by AT&T that UNIX had 100% forfeiture of
copyright through version 32V.
There are admissions in court documents by
AT&T that BSD code was incorporated, along with the public domain portion of
UNIX 32V into UNIX System V. There are admissions in court documents that UNIX
header files are public domain. There are judgements which cannot be retried at
this late date, that the "structure of UNIX" is not trade secret.
The ONLY
TRADE SECRET left was that people were being charged a lot of money for
licencing a software product which was largely public domain laying out in
bright daylight for anyone to see.
There are no broad "derivative works"
rights which may be argued for a compilation of majoriity of public domain
modules in a long-frozen structure that itself was neither trade secret nor
copyrighted. Only "derivative works", of the tiny "derivative" portion based on
a public domain compilation, can even be argued in court. Nothing else even
belongs to "UNIX".
http://e
cosyn.us/746patent/SmokingGun#SCO_Smoking_Crack_#01.html
Inside the
Linux arcana
By David Berlind, ZDNet US
18 March 2004
Did a 1994
agreement with SCO hand Sun a smoking gun?
http://e
cosyn.us/746patent/SmokingGun#SCO_Smoking_Crack_#04.html
"Since it
began to escape from AT&T's Bell Laboratories in the early 1970's, the
success of the UNIX operating system has led to many different
versions:
http://e
cosyn.us/746patent/SmokingGun#SCO_Smoking_Crack_#07.html
When UNIX
evolved within Bell Laboratories, it was not a result of some deliberate
management initiative.
http://e
cosyn.us/746patent/SmokingGun#SCO_Smoking_Crack_#08.html
The process
of the development of UNIX so it contained such a range of options involves its
adoption and development by the academic research community.
The labs
made the software available to academic institutions at a very small charge. For
example, John Lions, a faculty member in the Department of Computer Science at
the University of New South Wales, in Australia, reported that his school was
able to acquire a copy of research UNIX Edition 5 for $150 ($110
Australian) in December, 1974, including tape and manuals.
UNIX was
attractive to the academic Computer Science community
Faculty could
use UNIX and teach about it at the same time.
The fact that it was
written in C allowed actual code to be presented and discussed, and made it
possible to lift textbook examples into the real world.
Academic
contributions which were incorporated into research UNIX
Many
universities contributed to UNIX.
At Purdue University, the
Electrical Engineering Department made major improvements in performance,
producing a version of UNIX that supported a larger number of
users.
A tide of ideas had started a new cycle, flowing from academia
to an industrial laboratory, back to academia,
In 1976, there were
those three versions of UNIX.
It wasn't until 1978 that we had
anything that I would consider to be a reasonable configuration management
process of UNIX.
Much of the development of UNIX in Bell Laboratories
occurred before 1978.
Universities have simply picked up the
slack.
Meanwhile, academic UNIX users had to do their own software
maintenance. Lions describes how a community of academic unix users grew up who
were willing to help each other.
the number of universities using
UNIX and the lack of any formal support forced us to band
together
UUCP made such exchanges easier. It was included with the
Version 7 UNIX, which was made available to the academic community outside of
Bell Labs. UUCP made it possible for UNIX users to communicate with each other
even when they were at spatially distant locations.
Using UUCP, the
UNIX community was able to pioneer still another advance, Usenet
News.
the UNIX community has made inexpensive electronic
communication available to all of its members via Usenet,
by the
ability to move software easily among locations
http://e
cosyn.us/746patent/SmokingGun#SCO_Smoking_Crack_#09.html
Having
learned to maneuver through the source code,
http://e
cosyn.us/746patent/SmokingGun#SCO_Smoking_Crack_#10.html
Ken Thompson
and Dennis Ritchie presented the first Unix paper at the Symposium on Operating
Systems Principles at Purdue University in November 1973.
Unix was
installed by graduate student Keith Standiford.
Ken Thompson decided
to take a one-year sabbatical as a visiting professor at the University of
California at Berkeley,
The final release from Bell Laboratories was
32/V
As the research community continued to modify the Unix
system,
nearly 150 copies were shipped. The license arrangement
was on a per-institution basis rather than a per machine basis; thus the
distribution ran on about 500 machines.
Berkeley
Unix,
Over its two- year lifetime about 400 distributions were
shipped.
within eighteen months more than 1,000 site
licenses
Most of the Unix vendors shipped a 4.2BSD system rather than
the commercial System V from AT&T.
As networking and other 4.2BSD
improvements were integrated into the system V release, the vendors usually
switched back to it. However, later BSD developments continued to be
incorporated into System V.
they requested that Berkeley break out
the networking code and utilities and provide them under licensing terms that
did not require an AT&T source license.
the first
freely-redistributable code from Berkeley.
A licensee could release
the code modified or unmodified in source or binary form with no accounting or
royalties to Berkeley.
He solicited folks to rewrite the Unix
utilities from scratch based solely on their published
descriptions.
within 18 months nearly all the important utilities and
libraries had been rewritten.
When the dust settled, we discovered
that there were only six remaining kernel files that were still contaminated and
which could not be trivially rewritten.
verification of our method
for determining proprietary code,
Within six months of the release,
Bill Jolitz had written replacements for the six missing files.
He
simply put it up for anonymous FTP and let anyone who wanted it download it for
free.
http://e
cosyn.us/746patent/SmokingGun#SCO_Smoking_Crack_#11.html
The
Lawsuit
The suit alleged that the BSDI product contained proprietary
USL code and trade secrets.
irreparable harm from the loss of their
trade secrets
The remaining two complaints were narrowed to recent
copyrights and the possibility of the loss of trade secrets.
USL had
failed in their obligation to provide due credit to the University for the use
of BSD code in System V as required by the license that they had signed with the
University.
the University agreed to add USL copyrights to about 70
files, although those files continued to be freely
redistributed.
http://e
cosyn.us/746patent/SmokingGun#SCO_Smoking_Crack_#12.html
At the
time, AT&T was prohibited from selling computers or
software,
AT&T’s consent decree with the U.S. Justice Department
on monopoly charges was interpretted as allowing AT&T to release UNIX as an
open source operating system for academic use.
where students quickly
started making improvements and modifications,
UNIX quickly spread
throughout the academic world,
They shared their source with the
University of California at Berkeley.
AT&T continued development
of its Unix for a while, and that finished with System V.
AT&T
gave academia a specific deadline to stop using “encumbered code” (that is, any
of AT&T’s source code anywhere in their versions of UNIX).
http://e
cosyn.us/746patent/SmokingGun#SCO_Smoking_Crack_#13.html
Was 32V
published without notice of copyright?
Can any part of 32V possibly
be
considered a trade secret, given that much of it is industry
standard and
known to a generation of users and programmers?
1. Copyright
Infringement
has violated Plaintiff's
copyright in the UNIX source
code
The first factor to be considered is whether Plaintiff
has a
reasonable probability of prevailing on the merits of
this
claim.
Plaintiff must prove that it has a
valid copyright in
the UNIX code.
The publication doctrine
denies copyright protection
to works which the copyright owner
"publishes," unless the owner has properly
affixed a notice of
copyright to the published work. This doctrine has suffered
steady
erosion over the years, and it now applies in full force only for
works
published prior to January 1, 1978.
Because Plaintiff copyrighted 32V
in 1992,
BSDI seeks
to carry this burden by proving that AT&T and
Plaintiff have widely
published 32V without proper
notice.
Publication is defined as:
the distribution of copies or phono records of a work
to the public by sale or other transfer of
ownership, or by rental
lease or lending. The
offering to distribute copies or
phonorecords to a
group of persons for purposes of further
distribution, public performance, or public display,
constitutes
publication. A public performance or
display of a work does not of
itself constitute
publication.
Version 32V source code has now been distributed,
without notice, to literally
thousands of licensees.
Notice was omitted from thousands of copies
of 32V; no contractual
agreements require the licensees to affix
notice;
Plaintiff failed to copyright 32V until 1992, well over five years
after
32V was published; and Plaintiff has not yet made reasonable
efforts to add
notices to the many noticeless publications of 32V.
For example, if
a programmer sells
software to anyone willing to meet the asking price, then
the
programmer can hardly be said to have communicated the work to a
selected
group.
Consequently, the only question is whether AT&T
and
Plaintiff limited 32V's distribution or offered it to whomever
could
pay.
The copyright laws in effect prior to 1989 do not
allow
such expansive protection against the consequences of
noticeless
publication. As quoted above, publication includes
distributing
copies by "renting, leasing, or lending."
Consequently,
I find that Plaintiff has failed to
demonstrate a likelihood that it can
successfully defend its
copyright in 32V. Plaintiff's claims of copyright
violations are
not a basis for injunctive relief...."
2. Trade
Secret Misappropriation
after a
generation of scrutiny and imitation
as a highly-regarded computer
operating system, does any part of 32V remain
secret?
the next question is whether Plaintiff still has any
trade
secrets to protect.
In addition, the components of the secrets
may
all lie in the public domain as long as their combination does
not.
Plaintiff's first argument is that Defendants have copied
the
filenames and header files from 32V.
even if Plaintiff does retain
trade
secrets in Unix, Defendants carefully plucked these secrets out of
Net2
and BSD/386.
One fact does seem clear: the
header files, filenames,
and function names used by Defendants are
not trade
secrets.
Moreover, the nonfunctional
elements of the code, such as
comments, cannot be trade secrets
because these elements are minimal and confer
no competitive
advantage on Defendants.
As Defendants have repeatedly
emphasized, much of 32V
seems to be publicly available.
even if all
of the pieces of the 32V code
had been thoroughly revealed in publicly available
literature, the
overall organization of the code might remain a trade secret
unless
it too had been disclosed.
some of 32V's organization may
already be publicly available.
Berkeley has apparently released nonproprietary
programs such as
Net1 since 1987 (Regents Am. Opp'g Br. at 13), programs
that
presumably have divulged at least some information about
32V's
organization.
A further consideration is that 32V's
overall
organization may not even be protectable in the first
place.
If
Berkeley excises the proprietary information (as it
attempted to do
with Net2), Berkeley is free to distribute derivatives without
restriction. Berkeley has utilized this freedom in the past to
distribute a
number of non-proprietary systems and portions of
systems, all apparently
without objections from AT&T.
Berkeley's activities under
the
licensing agreement, and AT&T's acceptance of those activities,
are
evidence that Berkeley and AT&T interpreted the agreement to allow
the
disclosure of at least some of 32V's organization.
I find that I am
unable to ascertain whether
any aspect of Net2 or BSD/386, be it an individual
line of code or
the overall system organization, deserves protection as
Plaintiff's
trade secret. Since Plaintiff has failed to provide enough
evidence
to establish a "reasonable probability" that Net2 or
BSD/386 contain trade
secrets,
http://e
cosyn.us/746patent/SmokingGun#SCO_Smoking_Crack_#15.html
I. STATEMENT
OF FACTS AND PROCEDURAL HISTORY
Plaintiff does not actually
assert that it affixed notice to its distributions of 32V source code, only
that Defendants have not proved otherwise.
In fact, the record does
contain evidence that AT&T distributed 32V without notice of
copyright.
the AT&T legal staff instructed AT&T programmers
to place copyright notices on all the source files that made up the 32V
distribution, and then instructed them to remove all the copyright notices. The
source of this information is Steven Johnson, who was an AT&T employee
involved in inserting and removing the copyright notices.
AT&T
and USL have distributed the UNIX/32V source code without a copyright notice
pursuant to the license agreements referenced in response to Interrogatory No.
1,
all files contained within the UNIX/32V source code have been
distributed by AT&T or USL without a copyright notice.
Plaintiff's
second contention is that, even if AT&T did distribute 32V without
notice, it did not distribute 32V without notice to thousands of
licensees.
it was AT&T's written policy to affix a copyright
notice on [*5] all of its UNIX source code distributed after July 16,
1984.
http://www.ecosyn.us
/SCO_v_IBM_copyright_issues.html
SCO v IBM: SELECTED WEBPAGES
CITATIONS OF COPYRIGHT LAW HISTORY RELEVENT TO UNIX SYSTEM V COPYRIGHT CLAIMS
STATUS
[ Reply to This | # ]
|
| |
| Authored by: John Hasler on Thursday, March 18 2004 @ 05:11 PM EST |
> If developers, and that means coders, don't like you or your
> product, they won't work with you or for you, and then what
> will you do?
To PHBs like McBride "developers" are companies. Coders are mere
peons who do as they are told.[ Reply to This | # ]
|
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| Authored by: RedBarchetta on Thursday, March 18 2004 @ 05:18 PM EST |
Robert Bench seems to be a major driving force behind SCO's schemes. He is
the one handling the accounting in the shell game that will allow the SCO
executives make money regardless of the outcome of the lawsuits (in other
words, their public media FUD campaign will be paying nicely soon). For
instance, here's an admission of almost $900,000 coming to, among others,
SCO executives that hold Series A:
"Because dividends are not
payable during the first year the Series A is outstanding, the Company has
accrued dividends of $756,000 for three months ended January 31, 2004, which
reduced earnings to common stockholders. These dividends are in addition to
$123,000 in accrued dividends recorded in fiscal year
2003."
This means that by this coming October, they could
potentially receive as much as $4 million in accrued dividends. I am
fairly sure Canopy is among the beneficiaries of this scheme, but I don't have
time to verify this (I am fairly sure they hold A-1 Preferred,
though).
Another quote from the 10Q:
"Further, the
holders of shares of our redeemable Series A-1 Convertible Preferred Stock
will be entitled to receive a preferential distribution of our assets
prior to any distribution to our holders of common stock upon a liquidation,
dissolution, winding up or other change in control transaction in which we
sell all or substantially all our assets or merge or consolidate or
otherwise combine with another company or entity."
Two notable
items:
The "preferential distributions of assets" statement sure
seems like they are priming for Canopy to take over ownership of the UNIX
contracts SCO bought (their worth, however, is an entirely separate
issue).
Note the "consolidate" in the last bolded line. Again, it sounds
like Canopy is planning to merge, or "consolidate" SCO when it all collapses.
This is all part of their "exit" strategy.
My last
observation; I absolutely am stunned by this statement:
"In
addition to these above-mentioned actions, other regulators or others in the
Linux community may initiate legal actions against us, all of which may
negatively impact our operations or future operating
performance."
For starters, this is like me saying to my wife,
"honey, the cops or work might call wanting to speak to me." Nice
try.
It's amazing how they are attempting to gloss over this amazing
revelation by putting "other regulators" in the same sentence as "others in
the Linux community." First of all, what regulators? Government? National
Park? Environmental Protection Agency? The media needs to press SCO on this
statement!
"If I have seen further [than others] it is by standing on
the shoulders of giants." - Isaac Newton
[ Reply to This | # ]
|
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| Authored by: Anonymous on Thursday, March 18 2004 @ 05:27 PM EST |
Something for SCO customers and employees to think about.
What if Darl and David finally found the perfect lawsuit target? Somebody with
deep pockets, a complex UNIX and Linux install base, and big plans for a
fast-moving marketplace. Somebody who would just buy them out (like they
probably were hoping IBM would.)
Would such a company have ANY interest in or committment to maintaining SCO's
conventional product line?
Sincerely, Anonymous on Thursday[ Reply to This | # ]
|
| |
| Authored by: Anonymous on Thursday, March 18 2004 @ 05:39 PM EST |
Didn't Caldera Systems Inc. sell their Linux business to Caldera Inc/SCOG?
http://www.techdata.com/content/visitor/communic/comm_pr990920.aspx
From Tech Data webpage above:
"Caldera Systems Inc. has signed an agreement with Tech Data Corporation
for distribution of its complete line of Linux for Business products, including
the OpenLinux 2.3 operating system and other business solutions. Under the U.S.
agreement, Tech Data will provide distribution and logistics services for
Caldera as well as marketing support, reseller education, and technical services
via its recently announced Linux Support Center."
Now could it possibly be that SCOG is distributing Linux through a third party
and not have to say on their 10Q they are in fact doing so? If so how does the
GPL impact on Tech Data?
_[=================]_
---~~~~~~~~~~~~~~~---
from under the bridge
I realize I'm only the hired help here but I don't do Windows.[ Reply to This | # ]
|
| |
| Authored by: Terry on Thursday, March 18 2004 @ 05:41 PM EST |
Over the past few weeks I've looked at the majority of the Caldera/TSG SEC
filings and this one is the first to present adequate disclosure on the majority
of issues.
When reading this remember it's written from the viewpoint of TSG. They have a
bias and Groklaw readers have a different bias. That's OK. The important thing
is that they are now disclosing things in their filings the first time which is
the whole intent. User's of the report are expected to do additional research -
the filer is require to give them an adequate basis for performing the
research.
I think several things have come into play here. First, the finacial auditors,
KPMG, (whose fee doubled) may have influenced this filing after the January 10-K
fiasco. And maybe one of TSG's army of lawyers explained to Darl just what
"personal liability" his signature on the Certification for
Sarbanes-Oxley could entail.
For those who are not aware of SEC / quarterly report format, this is the report
for the quarter ended January 31, 2004. Reports are set up to reflect events
within and prior to the quarter and those that are post reporting date. Also
items can be posted to different area. (Past history was TSG buried event
mention in some obsure location or other "reference in another filing"
exhibit. In most cases it was probably enough to keep them out of real
trouble.)
This time they seem to have gotten with the act and no one reading the 10-Q can
say they're not aware of lawsuits.
You'll have to look in several different sections to find all the lawsuit
information. Some items are coverd several sections with more or less detail.
Main locations:
(6) COMMITMENTS AND CONTINGENCIES Litigation (p 12-14)
10) SUBSEQUENT EVENTS End User Lawsuits (p 17)
ITEM 2.MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS (p 19-20)
Risk Factors (p 39 - 43)
PART II. OTHER INFORMATION ITEM 1.LEGAL PROCEEDINGS (p 49-52)
Put these all together and you find their legal stategy;
1) Vigorously pursue the Novell action (maybe they figure out that they won't
get anywhere without this?)
2) Seek injuctive relief against IBM (fat chance)
4) Vigorously defend the IBM counterclaims (delay)
5) Vigorously defend the Red Hat action (Judge seems to be doing that for them)
6) Auto-Zone (ho-hum. Hey we filed it like we promised!)
7) Daimler-Chrysler (ditto)
8) The Australian Competition and Consumer Commission (“ACCC”) - responded to
information request
9) Germany, Austia and Poland (acknowledged fine and responding to additional
complaints)
10) India - vigorously defend
11) IPO - anticipating settlement that will remove company and individual
liability.
---
"You can fool some of the people all the time. You can fool all the people some
of the time. But you can't fool all the people all the time." --Abraham Lincoln.[ Reply to This | # ]
|
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| Authored by: Anonymous on Thursday, March 18 2004 @ 06:14 PM EST |
As pointed out, herre is the text about ACCC....
The Australian Competition and Consumer Commission
(“ACCC”) contacted us in August 2003 regarding complaints it has received
concerning our intellectual property claims and our statements regarding the
need for commercial Linux users to obtain a UNIX license. The ACCC further
informed us that it has not made any decision to pursue the complaints it has
received or determined what, if any, action it will take. We have hired counsel
in Australia and responded to the ACCC’s request for information. We have not
heard from the ACCC and it is unknown if future action will be taken.[ Reply to This | # ]
|
| |
| Authored by: red floyd on Thursday, March 18 2004 @ 06:36 PM EST |
So, did SCOX show a fourth quarter of profit? Or did all of Darl's hard work go
down the tubes and he needs to start over again for his four profitable
quarters?
---
The only reason we retain the rights we have is because people *JUST LIKE US*
died to preserve those rights.
[ Reply to This | # ]
|
| |
| Authored by: Anonymous on Thursday, March 18 2004 @ 07:11 PM EST |
Currently at $8.75 on Nasdaq. What was that magic limit, $7.00 or something?
Getting close, real close now ;-)[ Reply to This | # ]
|
- Sorry, no magic - Authored by: Anonymous on Thursday, March 18 2004 @ 07:54 PM EST
- Sorry, no magic - Authored by: Anonymous on Thursday, March 18 2004 @ 10:24 PM EST
- Sorry, no magic - Authored by: Anonymous on Friday, March 19 2004 @ 04:04 PM EST
| |
| Authored by: blacklight on Thursday, March 18 2004 @ 07:20 PM EST |
Constraint I. "Our ability to cut costs to offset revenue declines in our
UNIX business is limited to a certain extent because of contractual commitments
to maintain and support our existing UNIX customers."
On the other hand: "The decline in our UNIX business may be accelerated if
industry partners withdraw their support as a result of our SCOsource
initiatives and in particular any lawsuits against end users violating our
intellectual property and contractual rights."
In short, the SCO Group's ability to cut costs from its UNIX business is limited
while its vulnerability to losses from its UNIX business is far less limited.
Constraint II. "Our ability to raise additional equity capital is
restricted under the terms of our Series A-1 Convertible Preferred Stock. If
additional equity financing is available, it may not be available to us on
attractive terms and may be dilutive to our existing stockholders. Our ability
to raise debt financing is restricted under the terms of our Series A-1
Convertible Preferred Stock"
The SCO Group's cash position deterioriated from $64 mil to $58 mil within Q1
2004. In the meantime, its stock price took a dive to below $9, and this dive
should activate some of the financial triggers which came with the VC funding.
In terms of monitoring financial health, I believe that the SCO Group's cash
position is a critical parameter: if the SCO Group's cash position drops to
below the $50 mil it got in VC funding while its stock price remains below $9,
then the SCO Group will be at the everyday mercy of its VC backers. Such a
situation will make it impossible for the SCO Group's management to conduct any
long range planning, and I expect that its attitude will be "if there's no
short run, there won't be any long run" where long run will be measured in
quarters at most. I expect the SCO Group's performance to fit the phrase
"fast living and slow dying". [ Reply to This | # ]
|
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| Authored by: crs17 on Thursday, March 18 2004 @ 08:02 PM EST |
IANAA (I am not an accountant) or particularly versed in reading high finance,
but I'm curious about the value SCO put on the preferred stock. As I naively
see it, for the purpose of accounting, SCO (virtually or metaphorically)
converts the conversion posibilities of the preferred stock into an equivalent
"derivative" which it values at $11,600,000 on Jan 31, 2004. (refer to
footnote 5 in the 10K). Footnote 5 is confusing because it ties this
"derivative" to representing Series A stock and then reminds us that
there isn't any Series A stock left as of Feb 5. Is it correct to assume that
this derivative tracks the moneys invested in Preferred Stock, including the
transition from A to A-1?
Is this valuation saying that the expected cost to SCO to pay off the Series A-1
investors will be $11.6 million? Those investors put in $47.7 million (after
fees). Is SCO assuming that (in return for an 8 to 12% annual dividend payoff)
the investors won't mind an greater than 75% decrease in their capital?
Now I'm probably totally off base on the above but it would be interesting to
see if Royal Bank of Canada has to declare the current value of their SCO series
A-1 stock. RBC is a Canadian corporation and its public filings are available
at www.sedar.com which appears to be the Canadian equivalent to www.sec.gov. I
searched their annual report and recent "interim financial report"
(10K equivalent?) for "SCO" or "Baystar" and didn't find
anything. That's not too surprising, since RBC describes itself as the largest
financial institution in Canada (by market cap) and the $20 million they
invested in SCO Series A-1 is almost a roundoff error for their bottom line
numbers.
Does anyone understand this better than I do? Is there any interesting info
waiting to be found in the RBC filings?[ Reply to This | # ]
|
| |
| Authored by: Mark Grosskopf on Thursday, March 18 2004 @ 11:26 PM EST |
| This statement concerns me...
"Further, the holders of shares of our
redeemable Series A-1 Convertible Preferred Stock will be entitled to receive a
preferential distribution of our assets prior to any distribution to our
holders of common stock upon a liquidation, dissolution, winding up or other
change in control transaction..."
The key word here being "assets".
While it can be directly inferred from this statement that they mean stock and
capital assets, it can also be construed as other assets...like software source
code, for example.
And, there isn't much IBM, or Novell can do about it.
RBC could easily take that source code and, say, sell it for a dime on a dollar,
with an estimated street value of $500 mill which is...ummm, let me see...
50 million. The buyer? Well, how about Paul Allen for
example...
Speculation, yes, but the word "asset" in accounting language is
NOT just cash and buildings, car, etc. It is just about anything with any
cash value on the open market.
Mark [ Reply to This | # ]
|
- SCO's 10Q - Authored by: RK on Friday, March 19 2004 @ 02:54 AM EST
- SCO's 10Q - Authored by: DeepBlue on Friday, March 19 2004 @ 04:52 AM EST
| |
| Authored by: Anonymous on Friday, March 19 2004 @ 09:45 AM EST |
Didn't Caldera at some point in the past drop their Linux offerings after a big
investment from Microsoft?[ Reply to This | # ]
|
| |
| Authored by: Anonymous on Friday, March 19 2004 @ 10:07 AM EST |
Distribution, in the logistics sense. Tech Data is one of the big boys that
stocks and ships computer parts, software, whole systems, etc. to local
retailers - value added retailers/system integrators. They are a big source to
computer makers who sell less than 20K units a month(most makers). Basically
they store stock and guarantee long term purchasing contracts to manufacturers
(so many qty a month) so that manufacturers can keep the factories running at
regular rates in return for great discounts. Then vendors can buy from Tech
Data at irregular intervals to fill their stock (and large buyers get volume
discounts as well). This is the CHANNEL for retail that walmart/chains hate
because they do this themselves(and therefore have to compete). The channel is
the thing Microsoft would love to kill, but accounts for half the computer sells
in the US (the rest of the world is not such a free market). Channel
distributors like Tech Data are warming to Linux as Microsoft margins are single
digit even for them and Microsoft is openly hostile to them. Again Microsoft is
forcing people to do that which they feered they would do...
So.... Tech Data probably just signed a stock agreement with them, not a big
deal. They are basically counting sales that aren't sold yet (in channel) which
is usually a frowned upon accounting fudge.
SCO Unix stuff is not something the channel can use - ie. no one wants it on a
white box computer(and Tech Data should know this) also SCO Unix vendors usually
work direct with SCO. I wonder what they did put in channel to Tech Data?[ Reply to This | # ]
|
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| Authored by: brenda banks on Friday, March 19 2004 @ 11:21 AM EST |
email PJ
that is the best way to start
---
br3n
irc.fdfnet.net #groklaw
"sco's proof of one million lines of code are just as believable as the
raelians proof of the cloned baby"[ Reply to This | # ]
|
| |
| Authored by: Anonymous on Friday, March 19 2004 @ 11:26 AM EST |
Personal Theory:
SCO will go private later this year. They don't have that much stock
outstanding, and do have investors willing to put in money.
The stock buyback get's them most of the way there. Here's the numbers (from
Yahoo!)
Outstanding shares:
14.3M
Canopy Group:
~5.5M
Yarro:
~5.5M
This leaves at most 3.3M left. I say at most because other insiders may own a
significant portion of the rest. (Check the recent filings.)[ Reply to This | # ]
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