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| Dion Cornett On SCOXE's Future |
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Tuesday, March 29 2005 @ 11:59 AM EST
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Here's the latest from Dion Cornett's Open Source Wall Street, the March 28, 2005 edition, which he wrote after a meeting with Darl McBride, who I've heard has been meeting with journalists again as well:
SCOXE CEO meeting does little to shift opinion
Last week we had the opportunity to meet with The SCO Group’s (SCOXE: Market perform) CEO, Darl McBride. The meeting did little to alter our fundamental outlook for the business. Despite the Company’s high hopes for its pending release of an updated version of OpenServer, we remain skeptical that the product will drive significant new license revenue given the litigation cloud surrounding the Company. Past conversions with SCOXE customers suggest the Company’s core products are reliable and effective solutions, but that a relatively narrow swath of SCOXE’s installed base would be willing to make a new platform investment in the older x86 UNIX technology versus simply moving to Linux with its relatively guaranteed long-term viability.
Also, while the Company acknowledges that separating the UNIX business from the litigation could unlock some shareholder value and help product sales efforts, we believe that such a move is unlikely.
As part of legal preparations, one mock jury awarded $2 billion to SCOXE when it could show a damaged UNIX business, yet a separate mock jury awarded only $80 million under the scenario that the lawsuit was pursued by a separate intellectual property company.
We believe that hopes for a large jury win, partially driven by skepticism of the jury system itself, is likely to provide support for SCOXE’s shares regardless of minor legal losses that SCOXE may suffer from in the interim. Also, given this fact and that Ralph Yarro, post his settlement with Canopy, is now SCOXE’s largest shareholder at approximately 30% shares outstanding, we envision very little change in the Company’s legal strategy. In addition, this transfer of ownership indicates to us that Canopy Group believes little upside exists for the SCOXE shares and may have wanted to distance itself from the ongoing litigation.
Separately last week, SCOXE announced that they received a second delisting notice from the Nasdaq for failure to file its form 10-Q in timely fashion. Recall that SCOXE has still not filed its long-overdue form 10-K. Nonetheless, the Company reports that it continues to work with regulators and auditors and we are inclined to believe that SCOXE will be able to avoid delisting. That is if they want to and if they can, of course. Update: Dion Cornett has provided the following correction: After publishing our weekly newsletter, Open Source Wall Street, this morning, we were contacted by SCOXE’s CEO asserting that the mock jury findings he shared with us were related to a separate case SCOXE’s counsel had experience with and were not results from an SCOXE mock jury. We apologize if we misunderstood Mr. McBride’s original comments and regret any difficulties such misunderstanding may have caused.
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| Authored by: Griffin3 on Tuesday, March 29 2005 @ 12:06 PM EST |
| It's traditional. [ Reply to This | # ]
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- Corrections Here, Please - Authored by: mhoyes on Tuesday, March 29 2005 @ 12:29 PM EST
- "unlocked" should be "unlock" - Authored by: Anonymous on Tuesday, March 29 2005 @ 12:50 PM EST
- "conversions" should be "conversations" - Authored by: Anonymous on Tuesday, March 29 2005 @ 12:51 PM EST
- Corrections Here, Please - Authored by: moonbroth on Tuesday, March 29 2005 @ 01:10 PM EST
- Corrections Here, Please - Authored by: FrankH on Tuesday, March 29 2005 @ 01:50 PM EST
- "longoverdue" should be 2 words...n/t - Authored by: jbeadle on Tuesday, March 29 2005 @ 03:05 PM EST
- Corrections Here, Please - Authored by: Anonymous on Sunday, April 03 2005 @ 12:35 PM EDT
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| Authored by: Griffin3 on Tuesday, March 29 2005 @ 12:08 PM EST |
Please make links clickable.
Example: <a href="http://example.com">Click here</a>
Oh, yeah, and change "Post Mode" to "HTML Formatted", I
always forget that.
[ Reply to This | # ]
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| Authored by: Groklaw Lurker on Tuesday, March 29 2005 @ 12:12 PM EST |
"...Nonetheless, the Company reports that it continues to work with
regulators and auditors and we are inclined to believe that SCOXE will be able
to avoid delisting..."
I think it would be more accurate to say that the company will be able to
postpone delisting, not avoid it. SCO's future is slim to none and slim left
town...
GL
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(GL) Groklaw Lurker
End the tyranny, abolish software patents.[ Reply to This | # ]
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| Authored by: tangomike on Tuesday, March 29 2005 @ 12:13 PM EST |
$2 billion? $80 million ? Who were the mock attorneys and jurors?
More to the point: does anybody have a sense of how well mock trials predict
real trial outcomes?
Is this just more smoke, FUD, stock manipulation?
Inquiring (non-US) minds want to know.
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Nothing screams 'poor workmanship' like wrinkles in the
duct tape.
[ Reply to This | # ]
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| Authored by: RedHatMatt on Tuesday, March 29 2005 @ 12:15 PM EST |
What about a mock judge granting a mock summary judgement in IBM's favor?
Also, what about IBM's counterclaims? What does a mock jury have to say about
that? Where are these mock jurists anyway?
-Matt[ Reply to This | # ]
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- Oh, you know... - Authored by: Anonymous on Tuesday, March 29 2005 @ 12:57 PM EST
- In the Board Room - Authored by: Anonymous on Tuesday, March 29 2005 @ 03:35 PM EST
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| Authored by: Anonymous on Tuesday, March 29 2005 @ 12:16 PM EST |
``Past conversions with SCOXE customers suggest
...''
Hmm... I wonder if he didn't
mean:
``Past conversations with SCOXE customers
suggest ...''
[ Reply to This | # ]
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| Authored by: Anonymous on Tuesday, March 29 2005 @ 12:17 PM EST |
My, how the tables have turned. It is now The Company which is under
"litigation cloud", whereas the Penguin sports "relatively
guaranteed long-term viability".[ Reply to This | # ]
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| Authored by: Anonymous on Tuesday, March 29 2005 @ 12:32 PM EST |
"As part of legal preparations, one mock jury awarded $2 billion to SCOXE
when it could show a damaged UNIX business, yet a separate mock jury awarded
only $80 million under the scenario that the lawsuit was pursued by a separate
intellectual property company. We believe that hopes for a large jury win,
partially driven by skepticism of the jury system itself...."
This echoes comments I've posted here earlier, reporting on statements David
Boies gave in a "talk" I attended. He said, in summary, that once he
gets to a jury, he expects that they will be unable to understand the legal
issues, and he will frame the battle in terms of big (bad) guy versus little
guy, and he firmly expects to carry the day on that basis.
Whether he has any basis to believe that is another question, but it certainly
points out why summary judgment is the preferred venue for IBM.[ Reply to This | # ]
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| Authored by: Anonymous on Tuesday, March 29 2005 @ 02:21 PM EST |
I would like to know what evidence SCO showed these mock jurors.
Sure the whole mock trail might be covered under work product but for it to work
the jurors must be regular unbiased people. Surely these people could be found
and asked to describe what evidence SCO presented.
I don't think this will come up in the IBM case. But I could see it come up in
an SCO investor class action lawsuit. In the IBM case the Judge has seen no real
evidence from SCO.
Is SCO basing their lawsuit strategy on a very, very flawed mock trial that
included evidence that did get off the ground in the real lawsuit? That bogus
evidence would invalidate the mock trial results and would invalidate the
corporate strategy based upon it. Perhaps the mock stuff was done a lot earlier,
and now that SCO has found that their evidence does not fly they should revisit
their earlier results. [ Reply to This | # ]
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| Authored by: Anonymous on Tuesday, March 29 2005 @ 02:31 PM EST |
| Yes, the case never sees a jury. Either IBM gets SJ, or IBM settles it. [ Reply to This | # ]
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| Authored by: NZheretic on Tuesday, March 29 2005 @ 03:50 PM EST |
"Linux with its relatively guaranteed long-term viability"
Thats one
hell of a key phrase in Dion Cornett's article.[ Reply to This | # ]
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| Authored by: Anonymous on Tuesday, March 29 2005 @ 06:28 PM EST |
or did these mock juries only consider the outcome if found favorable for SCO
and what a possible settlement might be?
Was a win for IBM an option? and damages against SCO?[ Reply to This | # ]
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| Authored by: k12linux on Wednesday, March 30 2005 @ 12:22 AM EST |
Sure sounds like Daryl and friends are intentionaly leading journalists to make
conclusions in SCO's favor. They're playing the same reasonable assumption game
they often do.
When Daryl says that their counsel ran mock trails which awarded the plaintif $2
billion and $80 million, the reasonable assumption everybody would make is that
he's talking about a SCO case. Nope... looks like he's just talking about some
case out there handled by the same law firm. Too funny!
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- SCO is trying to save a sinking ship by drilling holes in it. -- k12linux[ Reply to This | # ]
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- SCO-Speak - Authored by: marbux on Wednesday, March 30 2005 @ 01:24 AM EST
- Misunderstanding - Authored by: _Arthur on Wednesday, March 30 2005 @ 10:16 AM EST
- SCO-Speak - Authored by: Anonymous on Wednesday, March 30 2005 @ 11:33 AM EST
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