SCO has announced the details of the Friday teleconference. They say they will explain the $50 million from BayStar and tell us what they will do with it and say "SCO will provide further details on the investment led by BayStar Capital Management." Hmm. "Led by" means others? I'm sure every word will be true blue and well worth the time invested. Only "press and industry analysts" are invited. The announcement calls them "the owner and licensor of the core UNIX operating system source code". It will be Friday at high noon, EDT, and there will be an audio replay for those "interested media and analysts" if they will provide SCO with their email.
BayStar Tells How to Invest Discreetly and Confidentially
Here's an interesting document. It's a white paper prepared by BayStar on PIPE transactions. Hint: go to Google and type in "baystar capital microsoft" and click on the third pdf link down on the page. Look at page three of the document. And there it is. Or just click here.
Here is how BayStar describes a PIPE transaction:
"A PIPE is a private investment in public equity. A form of private placement, PIPE transactions enable companies to raise capital in smaller amounts and with less dilution, lower expenses and greater flexability than a traditional secondary offering. PIPE transactions provide greater control and discretion in raising capital by allowing companies to issue securities without revealing their deliberations to the market until the transaction is completed. PIPE securities, which can be equity or debt or a combination of both, are typically sold at a discount to the current market price to a small group of accredited investors and/or institutional buyers seeking to acquire positions in desirable companies. . . . PIPE transactions -- particularly for those companies looking to access the capital markets quickly and discreetly without the increased visibility of a secondary offering -- can be an equally attractive or even superior vehicle for raising capital. The ability to conduct transactions confidentially, the reduced fees and management time, and the enhanced flexability of the process, are all important considerations that highlight the increasing value of PIPEs as an effective capital raising technique."
And who is listed in the top 10 list of investors in PIPEs since 1995? Why, Microsoft, silly. Who'd a thunk it? Disclaimer: this doesn't prove they made BayStar do this or gave BayStar the money to do it, or are the man behind the curtain or anything else necessarily. But it does mean we hope you journalists will read all about BayStar's investment philosophy in this document and ask SCO exactly where the $50 million is coming from, whether from BayStar alone or whether they are merely the conduit and if the latter, for whom?
UPDATE: I want to stress even more clearly than I thought I already had that this document does not demonstrate any MS-BayStar connection. MS invests in PIPEs and BayStar does them, but it doesn't necessarily follow that MS invested in BayStar. It's important to be fair. Yes, to MS too. And until we actually find a provable connection, and we have not so far, I don't want to contribute to any talk that such a connection has been proven. I'm very clear that no such connection has been proven, but I'm spelling it out very plainly, because I've gotten a lot of email from people sending me this document and saying it proves a connection. It does not, in my opinion, do that. It does raise the question, but it doesn't provide the answer on its own.