SCO Bankruptcy "Imminent, Inevitable"

mattaw writes "From analysis by Groklaw it seems that SCO may owe Novell nearly all the SCOSource licensing fees, and has been hiding the fact for 3 years. Imminent. Inevitable. Bankruptcy. Those are the words from Novell's lawyers. Perhaps the IBM/SCO case could close earlier than planned? Perhaps we can finally be rid of this specter once and for all?"

Their stock has actually gone up!

[Zontar_Thing_From_Ve]

I just checked the stock ticker and SCOX has actually risen in price today! It started at about $1.15 a share and it's at $1.22 now, so while they may be in a world of trouble, Wall Street still amazingly thinks the stock has some value. I am amazed that this stock is still selling for over a dollar a share, but far be it from me to suggest that the stock market makes any sense.

They've been doomed for how long now?

[Weaselmancer]

I mean seriously. We've been hearing variations of the "OMG SCO is teh doomed!" now for so long my eyes just glaze over when I see another one.

Call me when Darl is in jail or flees the country.

Next prediction.. SCO sues Tarantella/Sun

[HighOrbit]

The executives/investors in SCO/Caldera either:

1. Didn't understand what they bought from Santa Cruz (i.e. they thought they "owned" Unix, when they really didn't).
2. Didn't read the Santa Cruz - Novell APA, in which case they are morons for not reading the fine print in a multi-million dollar deal.
3. Understood the APA, but were greedy/crooked enough to try to get away with 'converting' Novell's royalties.

After Novell smacks down SCO/Caldera into bankruptcy, I would bet to see a lawsuit from Caldera's investors against Sun (now owners of the old Tarantella/Santa Cruz) claiming that Tarantella/Santa Cruz mislead them and misrepresented the nature of what they were buying when Caldera bought the Unix assets.

About 50 developers?

[rumblin'rabbit]

SCO's quarterly financial reports say different. They state about $2 million in research and development costs for the last reported quarter. If we assume that to be mostly salaries, then that's about 50 developers. SCO also makes software releases regularly containing many new feature. And now, a moment of silence in mourning over SCO's imminent demise ... that's long enough.

Re:Their stock has actually gone up!

[Explodo]

Due to the amount of money owed Novell vs the amount of money SCO has, it's possible that the stock price is going up due to speculators looking for Novell to acquire SCO in the near future....thereby getting Novell stock. Just a guess.

Re:Can they drop the suit?

[Anonymous Coward]

"Bonds against damages awarded in lawsuits" are effectively what shares in SCO have been for years. SCO has been loss making for years now, and makes little revenue, certainly when compared to their liabilities in lawyers' fees. So the only realistic sources of value in the company are the lawsuits: and thus the share price can be seen as the market's view of how likely a SCO win is. Its current share price is $1.19 [yahoo.com], giving a market cap of $25M. Since it's requesting at least $5 billion in damages, the market's view is that this outcome is a 40/1 shot. That's long odds in a 2 horse race.

Re:Their stock has actually gone up!

[Archangel Michael]

If Novell wins its counterclaims, SCO will cease operations, having no IP to speak of, especially in light of Counter claim 4, which says that Novell sold NOTHING to SCO, but only authorized them to sell licenses for Novell for an agent's fee.

This would mean that SCO falsely represented ownership claims to IBM in that lawsuit, and would have a huge liability regarding that fraud. In addition to all the other IBM counter claims, there is no way either Novell nor IBM would buy anything of SCO, if only to avoid the taint. Novell likes IBM here, at least partially, on a professional level.

My prediction is that SCO will simply disolve, having no IP, and no cash, and no value whatsoever. Whatever unencumbered assests (If any) and IP (If any) SCO has, will probably be split somehow between IBM and Novell, and probably down the lines of Unix IP / Other assets, IP. With the Unix IP going to Novell, and everything else going to IBM.

The only other option is a firesale of all the assets/IP SCO has, and the money split between IBM and Novell, along some agreed upon number.