|
|
| The Inevitable Stock Surge For "a Company in Decline" |
 |
|
Thursday, January 20 2005 @ 06:20 PM EST
|
Naturally, SCO's stock has surged. The stock has leaped on the news that IBM has to turn over more code. Since IBM's position is that SCO won't find anything no matter where they look, it's a puzzlement, until you look at their reasons. TheStreet.com asked a SCO long to comment:
Calling the order a "homerun for SCO," one buy-side investor who is long SCO said he believes the order this week requiring IBM to produce more information puts added pressure on the company to settle. It also postpones any potential dismissal of the case by the judge in response to IBM's request for summary judgment, said the source, who asked to remain anonymous. In other words, they like it that they think IBM is being pressured to settle (in the long's dreams) and they like it that it will take longer to have the case dismissed. What does that tell me? It sounds to me like they know the case will ultimately be dismissed or lost, that they think SCO has no leg to stand on ultimately, but they can make some fast money from an annoyance lawsuit one way or another before it is settled or dismissed. They don't seem to be anticipating a win. They would be right about that, in my opinion. But if some people can skim some easy money off this lawsuit, they are thrilled to do it. I'd ask to remain anonymous myself if that was how I made my money. Lots of crowing going on on Wall St. perhaps, but interestingly, SCO's Blake Stowell refused to comment for the Salt Lake Tribune's Bob Mims. And instead of commenting, the company merely put out a vague statement: "SCO is pleased with the court's order and we look forward to obtaining this important discovery so we can continue with our preparation for trial," the company said in a statement.
Executives from both SCO and IBM weren't available for comment. So I gather they know precisely how much this matters in the end and are laying low.
Meanwhile, Forrester says SCO, as a software company, is a company in decline, and even if they were to win the litigation, it won't be enough to prevent the end, not unless they can really make some money in 2005 to reverse their death march. Their analysis of SCO's future prospects in "Is SCO Toast? All Signs Point To Yes" is that it hasn't got much of one, unless they can seriously increase their business fast. They are, they say, a company in decline, and even if they win the litigation lottery, that will merely extend their goodbye as a software company into a long goodbye.
Here's their summary: SCO's most recent quarterly financial results indicate a continued erosion of its software business and a failure of its IP licensing program to generate significant revenue. Absent a dramatic reversal of fortune through its litigation efforts, SCO is a company in decline. Thus, Forrester reiterates its recommendation that Linux users not panic over the SCO litigation program, and that customers look for alternatives to SCO software. They note that SCO says they now have "a stable revenue" from their software business, but Forrester says that isn't enough to save them. Customer confidence has plummeted, and there are viable alternatives, like Linux. SCO is distracted by its litigation and even a win wouldn't reverse SCO's increasing irrelevance as a software supplier. With Linux growing so fast, and customer confidence shrinking, flat business means a decline in mindshare, they say. Their recommendation is to look to alternatives. So, SCO is now an annoyance lawsuit. That is their business? There is a lot of talk about capping damages in personal injury lawsuits. Maybe it's time to think about preventing IP annoyance lawsuits. I see they are tons of fun for Wall Street's conscienceless players, but what about the rest of us? What about innocent companies forced to endure an experience like IBM's? No one, not even the SCO longs apparently, thinks IBM will lose. Their chief hope from the beginning, as far as what they expressed publicly that I've read, have been pinned on IBM being so harrassed they decide to settle. That dream of theirs didn't come true and it won't. But their other hope is that they can make money on the stock the longer this goes on, and some are. There really is something wrong with a system like that.
Dion Cornett got it right, when TheStreet.com asked him for his reaction:
Decatur Jones analyst Dion Cornett, the only sell-side analyst who still follows SCO, called the discovery order handed down this week SCO's "biggest win to date."
"They basically have the right to go on a fishing expedition to try to prove their case," said Cornett, who has a market perform rating on SCO.
But if your biggest win is a discovery order, you are in big trouble.
|
|
|
|
| Authored by: BrianW on Thursday, January 20 2005 @ 06:48 PM EST |
It's like watching a car wreck in slow motion.
---
//Brian
#define IANAL[ Reply to This | # ]
|
| |
| Authored by: Anonymous on Thursday, January 20 2005 @ 06:56 PM EST |
And To get us started:
Liberals and conservites in politics indistigushible.[ Reply to This | # ]
|
- BBC Radio 4 "In Business" program about software patents - Authored by: DFJA on Thursday, January 20 2005 @ 07:02 PM EST
- Groklaw bandwidth - Authored by: Anonymous on Thursday, January 20 2005 @ 07:11 PM EST
- (repost) Wow, I can't believe this ruling - Authored by: Anonymous on Thursday, January 20 2005 @ 07:23 PM EST
- We'll see? - Authored by: Anonymous on Thursday, January 20 2005 @ 08:24 PM EST
- Linux support - Retail geeks are not geeky enough - Authored by: llosee on Thursday, January 20 2005 @ 09:23 PM EST
- Linux Inc.: Buisnessweek cover - Authored by: Anonymous on Thursday, January 20 2005 @ 09:57 PM EST
- Parody of IP:License to Sit down as conceptual art - Authored by: Anonymous on Thursday, January 20 2005 @ 10:04 PM EST
- Request for documents - Authored by: Anonymous on Thursday, January 20 2005 @ 10:33 PM EST
- URGENT: European software patents back on agenda - Authored by: Anonymous on Friday, January 21 2005 @ 12:29 AM EST
- Another try to sneak in Software Patent Directive in EU - Authored by: Anonymous on Friday, January 21 2005 @ 04:25 AM EST
- OT: Information for companies who use computers. - Authored by: Brian S. on Friday, January 21 2005 @ 04:45 AM EST
| |
| Authored by: Anonymous on Thursday, January 20 2005 @ 07:37 PM EST |
$1.13 is a big bounce? Only because the price is so low!
Even Enron, during its meteoric crash, had a few up days.
There will always be a few who make money day trading on
speculative stocks and the news about them. Most though,
loose their shirts. [ Reply to This | # ]
|
| |
| Authored by: billmason on Thursday, January 20 2005 @ 07:45 PM EST |
I think there were two dreams that SCOX investors had. One dream was a win
against IBM, thereby opening floodgates of licensing revenue against every user
of Linux. This wouldn't last forever, because the newer versions of the kernel
would have infringing code removed.
The other dream was that SCO would harrass IBM until they settle to get the mess
out of their hair. The mystery of whether or not UNIX code existed in Linux
would forever be unsolved, thereby allowing SCO to scare Linux users into paying
license fees for eternity.
When I read this Groklaw article, I realized that the second is actually better
than the first. This explains everything. SCO knew there was no infringing
code, and so did the investors, but this is an excellent way to harrass IBM into
settling, which is actually the most sustainable way to extract licensing
revenues from Linux users. I used to think that SCO was playing this trial very
poorly, but I was assuming they were trying to win. Now that I see that's not
the case, I think they did a very clever job of prolonging this as long as they
have. This whole "find UNIX code in Linux by looking at AIX" strategy
is working beautifully for them.
However, I'm very confident that IBM will not settle, no matter what. They have
deep pockets and can fight this to the end. If they settle, it will hurt Linux,
thereby hurting them. They will drag this out to the very last drop. If they
do this, they will win, so both of SCO's dreams are foiled.[ Reply to This | # ]
|
| |
| Authored by: Anonymous on Thursday, January 20 2005 @ 07:52 PM EST |
Imagine you've got 20 years worth of code to wade through.
Judge: Just how much time did you say you need to go through all the discovery
materials?
All they have to do is say that they think that they are onto something - this
Judge has made it clear that there can't be any reason for an appeal.
[ Reply to This | # ]
|
| |
| Authored by: Anonymous on Thursday, January 20 2005 @ 08:19 PM EST |
... then I suspect we'd see another decline on the back of this ruling. Respect
for the law is a good thing. But how can you expect this of people if the legal
system fails to perform in a manner worthy of respect.
I am not blaming the judges in this case - they must function within the
parameters of the system. Yet this case and the others have destroyed any faith
that I might once have had that the legal system is capable of delivering
something approximating justice in a timely fashion. Trial by combat seems like
it would be no worse, would be a whole lot quicker, and would at least be a lot
more interesting to watch.
Here we have a blatent abuse of legal process, an attempt to use the threat of
litigation to extort money which amounts to fraud. Outrageous public statements
with no basis in fact promulgated as part of a defamation campaign aimed at
besmirching the reputation of linux - a campaign which appears to have been
purchased through behind the scenes financial arrangements. Stock market
manipulation and shenanigans. It goes on and on.
All of this is totally outrageous. I am totally outraged! And the legal system
has done WHAT precisely in response to all this. For TWO years we have endured
this. And it goes on still! SCO will not lose this case. SCO will go bankrupt
first. This order and others will permit that to happen.
IBM, Redhat, Novell, Autozone and Daimler Chrysler will not be compensated.
Thousands of linux vendors around the world will be out of pocket due to the
delay and damage done to linux by this paid-for defamation campaign. The morons
who bought SCO stock or SCO licenses will be out of pocket. Microsoft, having
funded this FUD campaign will be untouched. Darl and friends will profit
immensely through their manipulation of SCOX stock and other financial
arrangements. What was once a good software company will have been completely
obliterated and the many blameless programmers and other staff who worked for it
will be out of work. We will not have our day in court. The mud that Darl has
thrown will stick - the FUD will remain in part unrefuted and the other paid for
shills - the ADTI's, the O'Garas and Didiots - will be free to continue the
campaign.
Yes SCO will lose in court. But look at who will end up rewarded and who will
end up out of pocket by this whole business. The people who conceived this
campaign will profit immensely by it. The blameless will have suffered
tremendous damage with no recourse. That is not justice. But that appears to be
the law.
The law sucks. If it was a stock I'd sell it.[ Reply to This | # ]
|
| |
| Authored by: Anonymous on Thursday, January 20 2005 @ 08:37 PM EST |
I think a good question to ask is - What is likely to happen next?
I can envisage a number of possible scenarios (you can put your own percentages
on the likelihood of each if you like, but I'll avoid that)
1. Settlement of at least some of the claims
Either (a) because the discovery is expensive for IBM to produce
Or (b) because of IBM seeing some merit to the claims
2. IBM winning at least some of their pending Partial Summary Judgment motions
3. Some or all the claims proceeding to trial (presumably in this case with IBM
delivering the ordered discovery)
4. Some combination of the above
Interestingly the anonymous buy side source seems to speculating in favor of 1,
possibly even 1(a) depending on how you read their comments. If you take it as
a 1(a) speculation, essentially the buy side source seems to be saying IBM
should settle just to make this mess go away.
The other side of the coin is if you don't think 1 is likely, then the question
arises how SCO will analyze the materials to be produced by IBM? One thing we
know, is SCO have repeatedly told the court that they haven't analyzed what they
have already got from IBM (for example, in response to the Summary Judgment
motions they said they haven't been given a reasonable time to analyze the
materials IBM have already produced, and they also have said (in one of Chris
Sontag's declarations) that they have done a full comparison of Linux and UNIX).
Of course, not doing analysis, would be consistent with hoping for 1(a) if that
was SCO's strategy.
One final point (please speculation not necessary about who precisely it is):
how did TheStreet.com know of the anonymous buy side source? It wouldn't seem
particularly likely to me that the source would be just a Joe Average Anonymous
Investor - because how would TheStreet even know of their existence? I would
have thought it seems more likely that it would be somebody who was a relatively
well-known SCO supporter (whom TheStreet could contact), or somebody who
contacted TheStreet offering to be their source. The point being the buy side
source *may* either have some inside insight into SCO's thinking, and/or
somebody who is motivated enough to contact TheStreet.
So I end on the same point - What is likely to happen next?
Your thoughts, comments, opinions, insights appreciated.[ Reply to This | # ]
|
| |
| Authored by: stingbot on Thursday, January 20 2005 @ 08:40 PM EST |
[www.eweek.com]
SCO's Short-Term Win
Won't Salvage Its Future
[ Reply to This | # ]
|
| |
| Authored by: tech_nix_yoda on Thursday, January 20 2005 @ 11:00 PM EST |
Ok guys, time for your history lesson.
How long did IBM fight the United Stated Government?
Oh, at the height of the McCarthy era, an era that makes today’s repugs look
like utra-power wanna-bes.
This was the case that made IBM pull in 10K patents and defend them like mad.
They fought of Uncle Same for 30 years. For 30 years, EVERY DAMN DAY an 18
wheeler left the IBM campus with documents for the US Attorney’s Office.
This what SCO has woken up. I talked with a buddy of mine over there, and they
are pissed. It seems the judge just wants to shut SCO the hell up, and in the
process unleashed this broad order.
Notice SCO is not jumping up and down going “WE WIN!!! TO THE MOOOOOOOONNN!!!”
No, they are quiet.
They know this is IBM’s license to unleash the hounds of hell at their gates.
BSF has told them to be quiet, as the last thing they now need is the expense of
analyzing 20 years of code, notes and experience.
Even worse, failure to do so could lead to very harsh sanctions not to mention a
rep for improperly following through for a client.
No, silence from Lindon tells all we need to know.
The white noise from the morons crying TO THE M()()()()()()NNN!!! tells me all I
need to know.
[ Reply to This | # ]
|
| |
| Authored by: Anonymous on Thursday, January 20 2005 @ 11:30 PM EST |
They only got half what they wanted so it should only take 12,500 years for them
to examine the code! [ Reply to This | # ]
|
| |
| Authored by: PM on Thursday, January 20 2005 @ 11:47 PM EST |
IBM may have played tough in this business, but they have played fair and clean.
For this IBM has not received its due from the justice system. When IBM is due
to be awarded costs, the pot will be empty unless IBM is able to reach into
pockets beyond SCO, but these pockets may not be worth the effort (except
perhaps the ultimate pocket).
Perhaps this time IBM may be tempted to hit below the belt to break SCO as
rapidly as possible, but IBM may well keep its powder dry for bigger game.
To throw in the sponge and settle with SCO would be a disasterous business
decision.
[ Reply to This | # ]
|
| |
| Authored by: Anonymous on Thursday, January 20 2005 @ 11:56 PM EST |
I've forgotten. What's up next in the Novell/SCO case? Seems to me that if it
turns out that SCO doesn't have copyrights to any of this code, then it may not
matter how much code IBM turns over for them to examine.
Something should be
happening there or did the judge take that case off the back burner and put it
in the fridge? [ Reply to This | # ]
|
| |
| Authored by: fudisbad on Friday, January 21 2005 @ 02:09 AM EST |
"No one, not even the SCO longs apparently, thinks IBM will lose. Their
chief hope from the beginning, as far as what they expressed publicly that I've
read, have been pinned on IBM being so harrassed they decide to settle."
That's quite correct. Even the trolls on the SCOX board agree with that.
---
See my bio for copyright details re: this post.
This subliminal message has been brought to you by Microsoft.[ Reply to This | # ]
|
| |
| Authored by: Anonymous on Friday, January 21 2005 @ 03:29 AM EST |
We established that Microsoft bankrolled SCOG (via proxies) to get this
going, and now they've got their wet dream; an effectively endless priviledged
court pulpit from which their mouthpiece SCOG can trash IBM and Linux, their
remaining competitors now that they have neutered Apple and SUN by investing in
them (in much the same way that a parasitic wasp "invests" its flesh eating
grubs into a caterpillar).
Sorry PJ, but it does make sense for IBM
to settle. We know this is just laughable FUD, but IBM's potential customers
don't. FUD is effective. IBM are in the business of selling
solutions, not fighting lawsuits. If they can make SCOG go away and contribute
cleanroom code to the kernel that ensures that they don't come back, then it's
going to be worth a lot for them to do that.
If it was just IBM versus SCOG,
then IBM could hand over the code and names and let SCOG choke on it, but they
know that it's IBM versus Microsoft, and that's a different ball game.
The
thing is, Microsoft can afford to bankroll SCOG to the sum of any sane IBM
settlement figure. So SCOG are set up either way, even if they never
sell another piece of software.
And that's why their stock is
looking like a good buy. It's got Microsoft or IBM money backing it to the
hilt. [ Reply to This | # ]
|
| |
| Authored by: Uraeus on Friday, January 21 2005 @ 03:50 AM EST |
One thing that struck me is that at this point in time maybe IBM should be the
one to start employing delay tactics. With the capped legal fees of the SCO
laywers it wouldn't need to be that long before this case starts cutting into
the pockets of Boies and friends. And at that point it will only be a question
of time before Boies and Co. starts panicking.
I am quite sure that Boies and Co. knows this lawsuit is a longshot, and while
they are happy to spend SCO's money pursuing such a longshot I bet you that
Boies is not interested in risking his own retirement fund on the tiny chance of
winning the lottery.[ Reply to This | # ]
|
| |
| Authored by: Wol on Friday, January 21 2005 @ 04:43 AM EST |
Can't IBM file an emergency order with Judge Kimball, stating that they need him
to dispose on the contract interpretation?
Bearing in mind he is on record as stating that the case schedule should not be
changed except in exceptional circumstances, and this discovery order is both
disruptive to the schedule and "based on a possibility", then the need
for a dispositive ruling on that interpretation of the contract is a necessity.
Cheers,
Wol[ Reply to This | # ]
|
| |
| Authored by: Anonymous on Friday, January 21 2005 @ 07:56 AM EST |
In the market, it doesn't matter what you think; it's what you think everybody
else thinks.
You think it's possible that shorts will panic and cover, so if you are short
you try to beat them to it. Thus, shorts really do panic and cover.
It doesn't last long. But those who sold got a great price.
[ Reply to This | # ]
|
| |
| Authored by: Anonymous on Friday, January 21 2005 @ 08:27 AM EST |
No, I do not want to compare you to our beloved clowns posing as analysts, or
think tanks. I mean serious press is starting to publish your
observations
See
article on eweek.com
"SCO Wins a Round in IBM, Linux Saga"
they are citing you just like
they would any serious analyst.
Pamela Jones, editor of Groklaw, an IT
legal news site, called the order "annoying because she enables more delay, but
other than that it is a pretty normal discovery order."
Jones, a SCO
critic, said the order is basically meaningless from IBM's standpoint. "[W]hile
this is annoying, it doesn't ultimately mean a thing," she wrote. "[B]y showing
all the code and letting SCO look at it all from now to doomsday, if they never
find any code that shouldn't have been donated to Linux, which is exactly what
has happened so far, we get the matter settled once and for all. So let them
look."
stanislav[ Reply to This | # ]
|
| |
| Authored by: tz on Friday, January 21 2005 @ 09:52 AM EST |
"A Cynic is someone who knows the price of everything but the value of
nothing".
The equities markets have rare moments of sanity, usually between periods of
depression (you can't give away stocks even when the dividend is 16% when
t-bills are paying 2-3% - see 1932), or periods of mania (so what it will burn
through the cash in 8 months, they just had a superbowl commercial so should
spike up on monday).
I mention this caution because SCOX is likely to be thinly enough traded to
react to lots of trivia. Also realize that for every buyer at the higher price
there was a seller (maybe even a short seller).
But also not to think IBM is a great buy or sell, or that what happens in the
case (good or bad for FOSS, just or unjust) will correlate with the stock price.
IBM also has good accountants and can "make the number", but this
sometimes creates a point where they can't or have to take charges or whatever
else - IBM is not just FOSS consulting. If IBM goes up or down, it will be on
different factors, likely including the overall mood of Wall Street. If we have
a panic and a crash, IBM will fall with the dot-com shells - maybe less.
But as I said, the market is usually not sane. It is either giddy or depressed,
so overvalues or undervalues the underlying businesses. Including IBM and
SCOX
[ Reply to This | # ]
|
| |
| Authored by: Anonymous on Friday, January 21 2005 @ 12:13 PM EST |
I guess this SCO surge and SCO's ultimate decline doesn't really surprise me.
The SEC filings really tell the tale of where they are going.
I used and supported SCO back to Xenix, through many iterations up to Unixware
7. I thought the Caldera purchase was a good sign, not the other way around. I
even recommended SCO to clients.
The lawsuit changed that, now I wouldn't spit on them if they were on fire.
After the lawsuit, I made it a point to migrate my previous SCO customers to
Linux (or *BSD if they were skittish). I was so anti-SCO, I migrated customer
applications for free.
They have forever lost me and any client I support (not a huge number, but
enough to pay the bills) as customers. I'm certain I am not the only one who
feels this way.
[ Reply to This | # ]
|
| |
| Authored by: technomom on Friday, January 21 2005 @ 03:51 PM EST |
It looks more like a blip than a surge to
me.
[ Reply to This | # ]
|
| |
| Authored by: SilverWave on Saturday, January 22 2005 @ 07:43 AM EST |
IBM need to turn BIG GUNS on Magistrate Wells - No more "Mr Nice
Guy"
Ok with this ridiculous discovery ruling it time to "sort
out" Magistrate Wells - She obviously likes to go with the flow. (Anything
for a quite life) and unless IBM teaches her to show them some respect, her daft
decisions are going to cost IBM a lot of time and money.
So IBM need
to APPEAL and go in hard.
"And the she’s not a geek" defence just
does not wash with me.
She gets PAID to be informed on the subjects she is
ruling on and if she needs help she can hire someone.
Oh as you can see
I’m really steaming at this bad decision. ---
Linux used ideas
from MINIX
MINIX|UNIX
UNIX|MULTICS
MULTICS|CTSS
CTSS|FMS
In science, all work is based on what came before it.
Andy Tanenbaum, 6June04 [ Reply to This | # ]
|
|
|
|
|
