decoration decoration
Stories

GROKLAW
When you want to know more...
decoration
For layout only
Home
Archives
Site Map
Search
About Groklaw
Awards
Legal Research
Timelines
ApplevSamsung
ApplevSamsung p.2
ArchiveExplorer
Autozone
Bilski
Cases
Cast: Lawyers
Comes v. MS
Contracts/Documents
Courts
DRM
Gordon v MS
GPL
Grokdoc
HTML How To
IPI v RH
IV v. Google
Legal Docs
Lodsys
MS Litigations
MSvB&N
News Picks
Novell v. MS
Novell-MS Deal
ODF/OOXML
OOXML Appeals
OraclevGoogle
Patents
ProjectMonterey
Psystar
Quote Database
Red Hat v SCO
Salus Book
SCEA v Hotz
SCO Appeals
SCO Bankruptcy
SCO Financials
SCO Overview
SCO v IBM
SCO v Novell
SCO:Soup2Nuts
SCOsource
Sean Daly
Software Patents
Switch to Linux
Transcripts
Unix Books

Gear

Groklaw Gear

Click here to send an email to the editor of this weblog.


You won't find me on Facebook


Donate

Donate Paypal


No Legal Advice

The information on Groklaw is not intended to constitute legal advice. While Mark is a lawyer and he has asked other lawyers and law students to contribute articles, all of these articles are offered to help educate, not to provide specific legal advice. They are not your lawyers.

Here's Groklaw's comments policy.


What's New

STORIES
No new stories

COMMENTS last 48 hrs
No new comments


Sponsors

Hosting:
hosted by ibiblio

On servers donated to ibiblio by AMD.

Webmaster
Lee Gomes of the Wall St. Journal Restores My Faith In Journalists
Tuesday, August 12 2003 @ 07:41 AM EDT

Remember the first reporter called on in the last SCO teleconference? The one who asked several questions before they made him stop? The one who kept interrupting Darl to get real answers instead of generalities? Well, take a look at what he wrote here. It will restore your faith that there are still some genuine reporters in this world. It's called "SCO not exactly the lovable little guy". It begins, "Sometimes in a David and Goliath story, you want to root for Goliath." And it gets better from there.

The Wall Street Journal, of all places, which means all those stock traders living in Never Never Land are going to read it. Here's just a taste:
SCO is claiming widespread copyright violations in Linux. So far, it has shown only one example to outsiders, and only to those who have signed a nondisclosure agreement -- such as Ian Lance Taylor, a San Francisco Linux developer.

Restricted by the agreement in what he can say, Taylor described the infringing code as a trivial 80 or so lines of software (out of a total of 4.6 million in all of Linux!). Despite SCO's frequent insinuations to the contrary, Linux developers take copyright quite seriously. Recently, the Web site Slashdot posted an item about another small section of Linux similar to Unix. Within weeks, the code was replaced.

SCO says it won't identify all the infringing code in Linux because Linux developers would quickly replace it. But isn't that exactly what someone alleging a legal injury should, for starters, want -- to stop being injured? Damages for past injuries can always come later.

Wait til you see how he ends his article.

SCO To Comment on Exec Stock Sales Thursday

Bloomberg Newsis now on the story of SCO selling about 119,000 shares of their company since March, totalling $1.2 million. Prior to March, there had been no insider sales for over a year, according to Washington Service, a company that does this kind of tracking:

"Insider sales picking up is a negative sign," said Richard Campagna, who helps manage $750 million as director of research for Cleveland-based Shaker Investments. SCO spokesman Blake Stowell declined to comment on the share sales. The company will comment on the sales when it announces fiscal third-quarter results Thursday, he said.
This is interesting. According to the article, published in the Salt Lake Tribune, of all unlikely places, IBM's Linux customers include Unilever NV, the world's largest maker of food and soap, and VeriSign, which registers Web addresses. Here's some more financial info:
At closing Monday, shares of SCO were down $1.46, or 14 percent, to $9.29, on the Nasdaq Market. IBM rose 14 cents, to $81.02, in New York Stock Exchange composite trading. Other investors are betting against SCO. The amount of short interest in the stock rose more than tenfold between May and July, according to Bloomberg data. Investors sell a stock short to profit on any decline in the price.

SCO, which changed its name from Caldera International in May, has had one profitable quarter since it sold shares to the public in 2000. SCO consumed $14 million in cash in the fiscal year ended in October and had about $10 million in cash at the end of April. The company has no borrowings.

I don't think the story has accurate figures. I had a list of all the transactions, but I seem to have misplaced it. I'll try to reconstruct and put it up as soon as I can.

  


Lee Gomes of the Wall St. Journal Restores My Faith In Journalists | 33 comments | Create New Account
Comments belong to whoever posts them. Please notify us of inappropriate comments.
radiocomment
Authored by: Anonymous on Tuesday, August 12 2003 @ 04:59 AM EDT
I'd just like to thank PJ and everyone else who's researching this case here;
it's nice to find a resource full of serious comments on a media case. style="height: 2px; width: 20%; margin-left: 0px; margin-right: auto;">Simon
Farnsworth

[ Reply to This | # ]

radiocomment
Authored by: Anonymous on Tuesday, August 12 2003 @ 05:28 AM EDT
The most remarkable thing about all this is that both articles are on the "Salt Lake Tribune" (Utah!) web site. It could be that they're doing a special about the whole SCO-IBM case.

Would McBride read the Salt Lake Tribune at home?


MathFox

[ Reply to This | # ]

radiocomment
Authored by: Anonymous on Tuesday, August 12 2003 @ 05:39 AM EDT
Two links for a delicious comment from Peter Skarzynski and Pierre Loewe:
http://news.com.com/2010-107 1_3-5062414.html and http://zdnet.com.com/2100-1 107_2-5062504.html

The content of the story is identical on both links ;-)


MathFox

[ Reply to This | # ]

radiocomment
Authored by: Anonymous on Tuesday, August 12 2003 @ 06:24 AM EDT
this may be close to what you're looking for:

http://www.sec.gov/cgi-bin/browse-edgar?action=getcompany&CIK=0001 102542&owner=include


james anderson

[ Reply to This | # ]

radiocomment
Authored by: Anonymous on Tuesday, August 12 2003 @ 06:55 AM EDT
I was wondering through all this if anyone would bring up William Della Croce Jr. as an example of "what not to do".
Steve Martin

[ Reply to This | # ]

radiocomment
Authored by: Anonymous on Tuesday, August 12 2003 @ 07:01 AM EDT
MathFox,

I'm not surprised that the news.com and zdnet.com stories are identical. Both are properties of cnet.com.


D.

[ Reply to This | # ]

radiocomment
Authored by: Anonymous on Tuesday, August 12 2003 @ 07:48 AM EDT
You can google for the CEO "Randy Edgerton", a Calgary marathoner, to find TAK Group information. There is a Salt Lake City, Utah connection from Sep, 2002 when TAK Group bought Lubetrak.

Brief company profile: http://www.lin e56.com/directory/company.asp?CompanyID=3528

Sep. 2002 they launch a web service: http://www.petroret ail.net/npn/2002/0211/0211tuin.asp

Sep. 9, 2002 they buy Lubetrak, headquarted in .... Salt Lake City, Utah http://www.lubetrak.com/new s/Sept_09_2002.pdf


Tossie

[ Reply to This | # ]

radiocomment
Authored by: Anonymous on Tuesday, August 12 2003 @ 08:01 AM EDT
Seems that SCO has sold it's first licences. See http://www. infoworld.com/article/03/08/11/HNscolicense_1.html
Antony

[ Reply to This | # ]

radiocomment
Authored by: Anonymous on Tuesday, August 12 2003 @ 08:08 AM EDT
Read Robert Hahn's "Trade Press an Embarrassment to the Industry" http://forums.com.com/group/zd.News.Talkback/zdnn/tb.tpt/@thr ead@217622@forward@1@D-,D@ALL/@article@217622?EXP=ALL&VWM=hr&ROS=1&PAGETP=2100&N ODEID=1104&SHOST=zdnet.com.com
David Mohring

[ Reply to This | # ]

radiocomment
Authored by: Anonymous on Tuesday, August 12 2003 @ 08:18 AM EDT
Like I have said in many a comment, McBride needs to be looked at for SEC violations. In any case, when this SCO case goes down, the comment that they will pay legal fees will simply drain SCO, but the insiders who have been selling out very frequently, will retain the money.(Check SCOX on Yahoo, click Insiders)

The only way to really make these fakirs go away for all time is to put them in jail. Nobody will want to try claiming property that never belonged to them again.

Respectfully IANAL.


Fooboy

[ Reply to This | # ]

radiocomment
Authored by: Anonymous on Tuesday, August 12 2003 @ 08:52 AM EDT
http://finance.messages.yahoo.com/bbs?.mm=FN&act ion=m&board=1600684464&tid=cald&sid=1600684464&mid=26912
quatermass

[ Reply to This | # ]

radiocomment
Authored by: Anonymous on Tuesday, August 12 2003 @ 08:52 AM EDT
http://finance.messages.yahoo.com/bbs?.mm=FN&act ion=m&board=1600684464&tid=cald&sid=1600684464&mid=26912
quatermass

[ Reply to This | # ]

radiocomment
Authored by: Anonymous on Tuesday, August 12 2003 @ 08:54 AM EDT
http://finance.messages.yahoo.com/bbs?.mm=FN&act ion=m&board=1600684464&tid=cald&sid=1600684464&mid=26912
quatermass

[ Reply to This | # ]

radiocomment
Authored by: Anonymous on Tuesday, August 12 2003 @ 08:55 AM EDT
http://www.nasdaq.com/asp/quotes_full.asp?kind=shortint&symbol=SCOX&sel ected=SCOX
quatermass

[ Reply to This | # ]

radiocomment
Authored by: Anonymous on Tuesday, August 12 2003 @ 09:56 AM EDT
Lubetrak, and TEKgroup, now a leader in eLubrication.
Fooboy

[ Reply to This | # ]

radiocomment
Authored by: Anonymous on Tuesday, August 12 2003 @ 10:19 AM EDT
http://www.viwes.com/invest/ shorts/sum6.html
quatermass

[ Reply to This | # ]

radiocomment
Authored by: Anonymous on Tuesday, August 12 2003 @ 10:40 AM EDT
Hellwig again http://linux-abi.sourceforge.net/quatermass

[ Reply to This | # ]

radiocomment
Authored by: Anonymous on Tuesday, August 12 2003 @ 11:00 AM EDT
quatermass

I saw that link on the Yahoo board. If you look closdely you will see that this is a patch to LINUX to allow it to run UNIX applications. All this proves is that some code was given to LINUX. Unless SCO points to this code as their IP placed into LINUX without their permission, this site contains no usefull information.


abtm

[ Reply to This | # ]

radiocomment
Authored by: Anonymous on Tuesday, August 12 2003 @ 02:13 PM EDT
So we have a well-reasoned, clueful article in WSJ

and 2 FUDDy articles in Forbes, neither of which spoke to the issues, more to personalities and tangents.

We can only hope the higher merit article reaches the right eyes.


Sanjeev

[ Reply to This | # ]

radiocomment
Authored by: Anonymous on Tuesday, August 12 2003 @ 02:43 PM EDT
Blake Stowel says the Fortune 500 licensee isn't Sun or Microsoft (http://www.itworld.com/Man/268 1/030812sco/) and also that it wasn't just one or two licenses but thousands of pounds. Anyone who wants to check the Fortune 500 list for likely suspects can find it here http://www.forbes.com/2003 /03/26/500sland.html

I don't think the info on the number of shares being shorted is too relevant - it is nearly a month out of date now and a lot has happened in that month. It will be interesting to see how the situation has changed when the new data comes out but the 23rd is a Saturday so we've got a bit longer to wait than usual.

With regard to the licensing scheme they have still got the pricing on their site (http://www.sco.com/scosourc e/description.html) so those people on Yahoo who say it has disappeared aren't looking hard enough. Quite possibly the call you back in a week response is because they realised most of the enquirers would be trouble makers so want to filter out those who are really interested.


Adam Baker

[ Reply to This | # ]

radiocomment
Authored by: Anonymous on Tuesday, August 12 2003 @ 04:57 PM EDT
Oh dear, my lack of knowledge of US business publications is showing up - I
searched on Fortune 500 and got to Forbes and just assumed they were related
rather than competitors. I presume the lists will be pretty similar anyway. style="height: 2px; width: 20%; margin-left: 0px; margin-right: auto;">Adam
Baker

[ Reply to This | # ]

radiocomment
Authored by: Anonymous on Tuesday, August 12 2003 @ 05:37 PM EDT
Adam,

Not to worry, and to add to the confusion Fortune has two seperate "500" lists. The the "Top 500 Financial Institutions" and the "Top 500 Manufacturing and Industrial Companies", and both lists are frequently referred to as the "Fortune 1000".

Since I read neither, I cannot comment on any differences 'twixt the two rags editorial policies...


D.

[ Reply to This | # ]

radiocomment
Authored by: Anonymous on Tuesday, August 12 2003 @ 08:11 PM EDT
"the story of SCO selling about 119,000 shares of their company since March, totalling $1.2 million. Prior to March, there had been no insider sales for over a year, according to Washington Service, a company that does this kind of tracking"

I am just a simple fellow from Kansas. Perhaps someone can explain what an insider is? Was Martha Stewart an Imclone executive?

For example can someone explain this bit of finance to me?

"SCO's warning about the lawsuit's side effects appears in a list of risk disclosures that companies must provide to investors. The filing also permits two major shareholders to sell a total of 1 million shares of SCO's 12.2 million outstanding shares of stock. http://news.com.com/ 2100-1007-994811.html?tag=fd_top

Who is vista.com?

The first shareholder is Vista.com Chief Executive John R. Wall, who obtained a 6.6 percent stake, or 800,000 shares, of SCO stock. Wall received the stock in connection with a transaction involving a SCO investment in Vista.com, a SCO license to market Vista.com's services and a $1 million convertible note SCO acquired that is payable by Vista.com. The transaction took place in the quarter ended Oct. 31, according to SCO's annual report." So here's a guy who was "given" 800,000 shares valued at $0.78 a piece or so in October. He now wants to start selling them for perhaps $10-15 per share as early as March. Every body notices Canopy Group selling off it's under performing Vultus (that sucking sound is shareholder equity being hoovered straight into Canopy Groups coffers). Neither Mr. Wall nor his company even get a passing mention in discussions about possible insider trading or the Martha Stewart indictment:) That convertible note that vista.com is covering for SCO would seem to take care of the purchase of the 800,000 shares quite nicely doesn't it? That's at least a multi-million dollar windfall by anybody's accounting if Mr. Wall has cashed out by now. The other big winner was the investment banker who was trying to find a buyer for SCO itself.


Harlan

[ Reply to This | # ]

radiocomment
Authored by: Anonymous on Tuesday, August 12 2003 @ 08:42 PM EDT
I found this about Martha http://econom ics.about.com/cs/finance/a/insider_trading.htm
quatermass

[ Reply to This | # ]

radiocomment
Authored by: Anonymous on Tuesday, August 12 2003 @ 08:48 PM EDT
Chart of SCO stock htt p://finance.yahoo.com/q?s=SCOX&d=c&k=c1&a=v&p=s&t=6m&l=off&z=m&q=l

Where did you get all of text from "So here's a guy who" and on - is this your opinion or a quote?


quatermass

[ Reply to This | # ]

radiocomment
Authored by: Anonymous on Tuesday, August 12 2003 @ 10:01 PM EDT
quatermass Sorry about that!
Everything between "SCO's warning about.....according to SCO's annual report."
was a single quote. I inserted the question "Who is vista.com?"
and failed to clean up after my edit. Yes I own those comments that follow. The
SCO filing permits a sale of 6.6 percent of the companies stock. The description
of the vista.com transaction is very "Canopy-like" in it's twists and turns. If
this were a Hillary Clinton commodity futures trade valued at $100,000, or a
Martha Stewart stop loss order valued at $40,000 it would be looked into and
widely reported. Did Mr. Wall make a pile of cash worth millions in a few short
months because of a law suit brought by a company he partnered with? At first
glance it certainly appears that way. This filing also permits the sale of stock
by an investment banker who has been shopping SCO around to prospective buyers
with no success. So of course it was a perfect time for the Web Services
Acquisition. I just can't figure out why they bought Vultus, I heared AOL was
available:)
Harlan

[ Reply to This | # ]

radiocomment
Authored by: Anonymous on Tuesday, August 12 2003 @ 10:01 PM EDT
quartermass,

in re: your post "Chart of SCO stock ..."

who in ze 'ell are you resonding to? What the FUD is your point?


D.

[ Reply to This | # ]

radiocomment
Authored by: Anonymous on Tuesday, August 12 2003 @ 10:10 PM EDT
D. That would be me. Since this is my third post, and my "Digital Dyslexia" is
really in full bloom tonight, good night all!
Harlan

[ Reply to This | # ]

radiocomment
Authored by: Anonymous on Wednesday, August 13 2003 @ 09:29 AM EDT
D, I think, I figured out the chart post

Harlan said "$10-15 per share as early as March"

SCO stock was very comfortably and easily in the sub $5 range in March, see the chart.

So I think Harlan or Harlan's source article is wrong. If there is a source article, I'd like see it too.


anon

[ Reply to This | # ]

radiocomment
Authored by: Anonymous on Wednesday, August 13 2003 @ 11:57 AM EDT
Yep that's it. Harlan already answered. $10-$15 is not part of the deal from
March.
quatermass

[ Reply to This | # ]

radiocomment
Authored by: Anonymous on Wednesday, August 13 2003 @ 06:34 PM EDT
anon:
No, I pointed out that the filing was necessary to permit him to start selling
shares for PERHAPS $10-15 per share as early as March. As you can see, the IBM
suit is mentioned as part of a warning contained in the same SEC filing. The
countdown to AIX termination had already been announced. It's that termination
threat that fueled the speculation that IBM would buy them out. Carrying out
that hollow promise should have caused the stock to decline, not go up. When the
deadline approached with no buyout from IBM their tactics changed to threatening
Linux distributors and users. Under the US Federal system if you want immediate
injunctive relief, and you are sure to win on any appeal, you just post a bond
and ask for it. How much do you suppose IBM would get for damages for wrongfull
termination? Yeah SCO doesn't have that much market capitalization, so a bond
that size is out of the question. They also would have to convince a judge that
their claims have merit and that they are likely to prevail at trial. style="height: 2px; width: 20%; margin-left: 0px; margin-right: auto;">Harlan

[ Reply to This | # ]

radiocomment
Authored by: Anonymous on Wednesday, August 13 2003 @ 07:29 PM EDT
AFAIK, pulling the license, even if it was allowable, would only help SCO if IBM were to settle or pay them off as a result. IANAL, but the contract doesn't seem to have any term which could be construed as saying "You can do X, if you pay Y extra"

If SCO's investors believed SCO could pull the license, as they (SCO) said they would and had, then this would run up the stock price probably.

IANAL, but I agree on the preliminary point, to the limit of my (very limited) knowledge. I think SCO would probably also have to show that by not granting the preliminary, they would lose something which could not be made up by money later.

One last point on the June 16th press release. It seems pretty clear they said they'd filed the amended complaint, and filed for the permanent injunction, on June 16th ("today"), was that in fact the case?


quatermass

[ Reply to This | # ]

radiocomment
Authored by: Anonymous on Wednesday, August 13 2003 @ 08:32 PM EDT
"AFAIK, pulling the license, even if it was allowable, would only help SCO if IBM were to settle or pay them off as a result."

That's one of the points I'm making. Another is that they don't appear to be controlling things exactly, just that they appear to be manipulating things. Remember you are just as guilty of insider trading if you only use information that isn't available to the public to reduce your losses.

Everyone was led to believe these guys were going to go after folks who were using their libraries without a license, e.g. FSM Labs went after Lineo while Caldera still owned them over the Real Time Operating System patents. Caldera ponied up, but FSM Labs wouldn't pay for their use of SCO's libraries. IIRC even Linus mentioned this at the time on the kernel.org lists.

If you knew that SCO was going to sue their own Unix licensees over Linux, and you were given 800,000 shares or an option on 200,000 shares (Sun Microsystems) before the public was let in on the secret - that's a huge advantage. That's bigger news than the 119,000 shares that the executives have given themselves.


Harlan

[ Reply to This | # ]

Groklaw © Copyright 2003-2013 Pamela Jones.
All trademarks and copyrights on this page are owned by their respective owners.
Comments are owned by the individual posters.

PJ's articles are licensed under a Creative Commons License. ( Details )