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SCO Possibly Delisted from NASDAQ 366

Posted by Zonk
from the my-karma-ran-over-your-dogma dept.
canfirman writes "Reuters is reporting that SCO could be delisted from the NASDAQ because "it has not filed its annual 10-K report with the SEC". The company claims it's because "it is examining matters related to stock issued as part of its compensation plans". SCO Stock is sitting at $4.30 at opening today. It'll be interesing to see where it goes from here."
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SCO Possibly Delisted from NASDAQ

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  • requirements? (Score:5, Interesting)

    by AviLazar (741826) on Thursday February 17, 2005 @12:29PM (#11700560) Journal
    Since SCO has stocks issued to the public, aren't they required to fill out the proper paperwork? How does one who own SCO stock supposed to sell his stock? Can they do this w/o getting sued by their share holders?
  • They'll appeal (Score:5, Interesting)

    by sfjoe (470510) on Thursday February 17, 2005 @12:38PM (#11700724)

    The rules that lead to being delisted are pretty cut-and-dried. However, a company with a solid business plan to rescue themselves will more often than not be given a break and allowed to remain listed while they work things out. Failing to file your 10-K is almost never an "accident". Add to that the fact that SCO really has no business plan beyond lawsuits and I think we'll likely be seeing them de-listed fairly rapidly.

  • by drdanny_orig (585847) * on Thursday February 17, 2005 @12:39PM (#11700734)
    Is there any way to purchase a single share and get a hardcopy certificate? I think an SCO stock cert from this month might be a really cool thing to hang on the wall.

    Yes, I'm serious.

  • Re:Gloating? (Score:5, Interesting)

    by ArmchairGenius (859830) on Thursday February 17, 2005 @12:40PM (#11700761) Homepage
    Not filing your SEC filings is always bad. When it gets so bad NASDAQ delists you, it means that you are about to get sued, and get sued hard. I can pretty much guarantee a Section 10(b) fraud class action gets filed against SCO in the near future. And I also am willing to bet the SEC will start investigating them as well... Good thing they have plenty of lawyers....
  • by ishmalius (153450) on Thursday February 17, 2005 @12:48PM (#11700897)
    After Enron crashed, their stocks certificates actually became worth more as souvenirs than any possible redemption value (little or none.)
  • by oliana (181649) on Thursday February 17, 2005 @12:49PM (#11700914) Homepage
    The article said they are having difficulties with reporting their stock based compensation. There are new (and quite ridiculous) laws concerning stock option expensing. There are various methods to calculate the value of stock options, and every way is more "correct" than the others, and even more "wrong." They are probably having a disagreement with their auditors on their estimates of the value of their stock options.

    There is probably nothing wrong with the Accounting department.
  • SCO Website (Score:5, Interesting)

    by rokzy (687636) on Thursday February 17, 2005 @12:55PM (#11701026)
    anyone else notice that under "products and services", SCO lists its court cases?

    very funny and depressing at the same time.
  • Screw the Lawyers (Score:5, Interesting)

    by Doc Ruby (173196) on Thursday February 17, 2005 @12:56PM (#11701034) Homepage Journal
    SCO's paying their lawyers in stock, which explains their entire strategy: keep the stock price elevated, and cash them in, before they inevitably lose the case and it all collapses. Delisting SCO right away could castrate that strategy, if the lawyers haven't sold any stock yet. Maybe those sharks won't be able to afford to defend themselves from an SEC investigation of that criminal strategy, and get disbarred.
  • Re:If they go down. (Score:3, Interesting)

    by MightyMartian (840721) on Thursday February 17, 2005 @12:58PM (#11701078) Journal
    > If SCO dies during the trial , where does that
    > leave the whole Linux IP issue ? Not proven ?
    > Wouldn't it be better if they can at least survive
    > until they get totally defeated in court, as a
    > deterrent against other legal attacks ?

    That is my fear. I'd prefer to put up with another year of SCO, and have them handed their balls on a platter by a court, than to have them simply cease functioning, and some other company come along, by the foetid remains and restart the process, bringing another two or three years of litigation and threats.

    To my mind, having SCO sink now would be bad, because the fundemental claims would not be tested, and it would only invite another attack.
  • Re:If they go down. (Score:5, Interesting)

    by Jason Earl (1894) on Thursday February 17, 2005 @01:13PM (#11701308) Homepage Journal

    Getting buried in a countersuit that completely bankrupts your company without even getting all the way through trial is about the biggest deterrent that I can imagine. The next SCO wannabe will think twice before suing Big Blue. Once SCO is gone the entire question of whether or not Linux is tainted with illegal UNIX code becomes moot. With SCO out of the way the only company that has even a little bit of a shot of using UNIX copyrights against Linux becomes Novell, and Novell has essentially bet the future of the company on Linux.

    It was a stretch for Caldera (now SCO), a long time Linux distributor to pretend that they didn't know that their copyrighted code had been included in Linux. After Novell's involvement in the SCO vs. IBM case even the dimmest jury would find it impossible to believe that Novell didn't intend to distribute Linux under the terms of the GPL.

    In essence, as long as the folks who own and control the old UNIX copyrights are actively distributing Linux the community has very little to fear.

    It would be nice if the GPL was tested in court, if only to shut up all of the GPL naysayers, but that would simply be a bonus.

  • Which Endgame? (Score:3, Interesting)

    by ackthpt (218170) * on Thursday February 17, 2005 @01:18PM (#11701377) Homepage Journal
    This isn't gloating, it's war. We can gloat when the litigious bastards are out of business completely.

    I prefer them to stay in business but completely disengage from their anti-Linux/anti-Open Source antics. Darl and his goons should leave and people with some damn sense should go in and revive the company and work with Linux and Open Source communities.

    Slashdot is read by zillions of people who can not only sell their SCO, but also advise others to do so.

    Are there actually any die-hard /. readers holding the stock? I think not, except possibly speculators who put $1000 in and are hoping for a lottery payout, but can afford to write off the loss if SCO dies. As far as advising people who hold SCO stock, if you hold stock it's in your best interests to follow it rather than rely on /.ers to call you up.

    "d00d, dr0p ur sc0 st0ck!"

    Slashdot is also read by all kinds of mainstream journalists who might not otherwise notice what SCO is up to. One could argue it's been a damned effective campaign so far. Were it not for /. clearing up the FUD, their stock would probably still be flying high on rampant speculation.

    Hm. Slashdot has some good information, but a savvy reader looks to it as a starting point, not the endpoint of seeking information.

  • Re:SELL SHORT? (Score:2, Interesting)

    by slartibart (669913) on Thursday February 17, 2005 @01:21PM (#11701442)
    I'd say that if you are really confident that SCO is going to lose (ie, 99% sure), then short it.

    You gotta figure if they lose, the price will drop well under $1. If they win, it could rise to $100. If you work out the figures you've got a winning bet (assuming your perception of the odds is correct, which is a big assumption).

    I personally shorted at $15, again at $10, and again at $8. I have only covered about 5% of what I shorted. I am tempted to short even more, but I feel like the potential gain is too small ($3 and change per share) to risk losing so much (as much as $100 per share, maybe more, maybe less).

  • Slap a $20 down? (Score:3, Interesting)

    by Anonymous Coward on Thursday February 17, 2005 @01:30PM (#11701584)
    So.... Could I wait for the stock to drop to 0.01, then just buy the whole company for like $20.00?

    I'm serious. Would this be the vehicle by which someone Pro-Linux could acquire what actual rights SCO had, then choose to release them into the GPL for certain, as well as formally acknowledge that the debated rights had also been GPL'ed?

    In short, buy Darl out like he wanted but not at the price he wanted? Then turn what's left of the company into something useful?
  • by Duhavid (677874) on Thursday February 17, 2005 @01:53PM (#11701935)
    I suspect it has something to do with the outster of those canopy group exe's. Yarro et al.
  • The hope (Score:3, Interesting)

    by mcc (14761) <amcclure@purdue.edu> on Thursday February 17, 2005 @02:01PM (#11702071) Homepage
    The hope on slashdot previously seems to have been that something called "piercing the corporate veil", whatever that means, will happen and IBM will find a way to make their and Redhat's SCO countersuits and such continue-- only instead of against the defunct The SCO Group, they would continue against The SCO Group's boardmembers, or against The Canopy Group.

    I think this is highly reasonable. Despite their supposed status as "investors" The Canopy Group has treated SCOX like SCOX was a puppet and they had their hand stuck up its ass. It would be hard to not consider them responsible for literally the entire SCO mess; they're a company which before SCO had repeatedly bought up near-death companies, milked them for potential lawsuit damages that the company could claim from others, then discarded the husks. They did this with Caldera. Then once SCO gets under the Canopy, suddenly the new CEO Darl McBride starts slinging strange copyright claims everywhere-- and it's becoming increasingly clear as SCO admits in court again and again that the "evidence" they purported at the start of the mess never existed that these claims were fraud from the beginning, and everyone involved at the time knew this. How could The Canopy Group be considered not to have directly engineered this?

    Meanwhile the manners in which both SCOX's boardmembers and The Canopy Group have benefitted from SCOX's death spiral have been bizarre and incredibly poorly hidden. Right before the entire lawsuit started the SCOX board voted to issue themselves huge gobs of SCOX shares at virtually no cost, then set them all to sell once they reached a certain price-- then, funny that, started the lawsuit claims that briefly inflated the cost enough that those shares got sold. Meanwhile Canopy has done odd things such as stock transfers and "business deals" between SCOX and other Canopy holdings-- business deals that make no business sense whatsoever, what does a litigation company need with research XML technology?-- that essentially allowed them to convert SCOX stock into cash for the canopy board without directly raising anything at the SEC.

    I don't know if this is realistic, it could just be wishful thinking on the part of slashdotters. I wish someone could make it clear to me whether it is. However it seems that if there's ever a situation under which corporate veil-piercing is possible, it should be this one. Corporations shouldn't be used as a shield to run around doing illegal things and then once the corporation suddenly dies say "whoops, it wasn't me, it was the corporation".

    The people who made SCOX do this-- The Canopy Group and the boardmembers they installed-- clearly must have known big swaths of their claims early on were outright lies, and yet they used these claims to drive SCOX like a drunk driver behind the wheel of a bus, hurting others' businesses, costing IBM huge amounts in litigation that has gone and will go nowhere, violating the lanham act, misleading and defrauding investors and possibly even violating SEC rules, and placing SCOX into a situation where they are the target of multiple on-hold countersuits with real possibilities of damages being awarded-- and made fantastic amounts of money doing so. Once SCOX finally crashes with none of these debts or countersuits repaid, would the law really let them just walk away from this?
  • by SoTuA (683507) on Thursday February 17, 2005 @02:29PM (#11702489)
    Maybe none of the accountants who have to certify the results are willing to sign, now that these "issues" have been uncovered. Perhaps, they are having trouble covering it up and/or gettting someone to certify the results?

    Remember that some months ago there was a "Senior accounting position" open in SCO? And we, in usual /. fashion, speculated that it might be due to inability to find somebody willing to sign his/her name under the mess that was going on?

    Hmmm...

  • by Sevenfeet (657415) on Thursday February 17, 2005 @02:49PM (#11702773)
    The "excuse" that they are investigating stock issued for compensation is not a lame excuse. Given the turmoil going on at Canopy right now, William Mustard is trying to make sense of the largess of equity compensation that was given out at Canopy and its daughter-companies. SCO is probably a particular target for Mustard's investigations since he has to oust Yarro from its board on orders from the Noordas, and then investigate all of the stock and options deals these guys have been doing. Heck, they were even issuing equity to their lawyers, a highly unusual move.

    It's probably very complicated and I imagine that they are racing to do as much forensic accounting as possible to realize what's truly going on before filing the 10-K and making other appropiate financial and personnel decisions.

    I do expect that the 10-K will get filed soon before they get delisted, but the other shoe is about to drop at SCO. Hang on to your butts....

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