SCO Group sent Delisting Notice by NASDAQ
 

NASDAQ has sent the SCO Group a delisting notice

For the uninitiated, SCO Group was a Linux distributor that bought rights to UNIX and DR-DOS on the cheap. They then claimed Linux contained elements of UNIX and began sending letters to large companies running Linux demanding payment of licensing fees. It should be understood that SCO took the name of the software and did not actually create SCO UNIX.

Most of the software SCO sells was originally written by someone else - AT&T, Novell etc. If you include the Linux community that SCO was originally partnered with, they are pretty much suing everyone who ever had a business relationship with, and their customers.

Their stock back around 2000 was selling for over $80 a share and is now selling for about 80 cents. When they started suing everyone in sight their stock bumped up to about $20 a share. A cynical person could say this whole lawsuit business was a giant 'pump and dump' scam, with insiders selling out while the stock was run up by the lawsuits.

Now they're in danger of being delisted. Unfortunately, the **&*rs behind this whole mess probably cashed out long ago.

Still, it looks like their vultures have come home to roost. UT has not put up a 'tap dancing on their grave' smiley, so this will have to do.:reaper::jig:

Timeline of SCO-Linux dispute

Glad to hear it.

Couldn't happen to a nicer bunch of ... well, you know.

Glad they're going in the tank...one of the dumbest lawsuits I've ever heard was them suing IBM, I think. I believe I read about it here.

Put yourself in SCO's president's chair. They bought the rights to UNIX. Suddenly Unix is being distributed for free. What would you do as that president or the company's BoDs? Just give up, fire everyone, and quit? Then the officers and BoDs would be sued. What choice did they have?

There are many many companies making excellent money from this "free" Unix. Redhat's market cap is $4B, partly by partnering with IBM instead of fighting them. Oracle/Novell are trying to figure out how to leverage their abilities. SCO was in the perfect position to be the top of them all. Utter, utter morons.

IBM offered to pull the proprietary pieces out, but SCO wouldn't have it. What could have been solved fairly easily has become a costly battle and may spell the end of SCO. Perhaps they fought too hard.

If IBM only removed 'offending' code, then SCO was still done - bankrupt. SCO was doing the only thing they could to survive. You cannot fault them for it. They paid big bucks for Unix. They were responsible to so many stockholders. SCO was only doing what was necessary to survive.

Now if you can provide them with another answer, what would that be? Remember one of the most fundamental requirements of the executives - their responsibility to stockholders: survive. The only way one can legitimately attack SCO: if they had another option and did not take it. SCO had no choice. SCO had to survive. It is management’s obligation to stockholders.

One should have much sympathy for SCO. They got caught in a no-win situation. Shame. Because when they bought Unix, they were only trying to save a product stifled and almost destroyed by AT&T MBAs.

There are many many companies making excellent money from this "free" Unix. Redhat's market cap is $4B, partly by partnering with IBM instead of fighting them. Oracle/Novell are trying to figure out how to leverage their abilities. SCO was in the perfect position to be the top of them all. Utter, utter morons.

They won't survive. They had infinite choices. They picked the wrong ones.

Redhat has now moved to the NYSE while SCO faces de-listing. Before Redhat ever existed, SCO had a support system, training, a serious customer base, and everything else Redhat had to develop from scratch. They were well-liked in the silly valley and had lots of great people. They simply had no vision.

This isn't a person breaking speed limits to get to a hospital. If a company has to file frivolous and malicious lawsuits "to survive", then it shouldn't.

tw = AT&T MBA = tw = AT&T MBA.

So how do you tell that to the stockholders? If management did not do something, then stockholders would be filing those 'frivolous' lawsuits against management. In fact stockholders would be wrong to not file frivolous suite. Somebody was going to be sued.

SCO paid big bucks for Unix long before Linux existed. SCO could not make a profit on that investment by selling free Unix. For that matter, various Linux distributors are only doing average - even without a large debt that SCO incurred.

If SCO sold Linux, then SCO was dead. You would blame SCO for doing something -buying the rights to Unix - BEFORE Linux even existed?

SCO did not get into the business to destroy Linux. SCO purchased the license and rights to Unix BEFORE Linux existed. Suddenly Linux shows up and starts selling SCO's product under the Linux name. What is management suppose to do? If did not file suit to protect their licenses, then what were their options? It is hearsay in business to surrender - give up and declare bankruptcy without a fight. A #1 objective of any business - to survive. No manager could ever do that - surrender. If he did, frivolous lawsuits would be filed against him.

Agreed: what SCO did was not productive. But they did everything right - and got slammed by something nobody saw coming: Linux. I have sympathy for SCO. Not just for the company; for its stockholders. They got caught and destroyed by something that nobody saw coming. They did not try to buy in and destroy a Linux industry. They owned the UNIX business when suddenly something came along and did what SCO thought only they owned.

If you think they should not have sued, then what should they have done? Because there were no options, then frivolous lawsuits were inevitable. At least the one’s SCO filed set legal precedence for this whole new business concept. SCO was simply a victim of something that nobody saw coming.

"You made a bad investment."

None had the debt that SCO incurred to own Unix. Those Linux companies came to market flush with stock market money - and no debt. And still some of those Linux companies failed. Failed when they did not even pay for the license.

Meanwhile SCO's business model was dependent on a license that only they owned. SCO could never match what Red Hat could offer IBM. SCO had paid for their license. Red Hat did not. SCO had already sold their stock to buy a license. SCO could not compete against companies that paid nothing for the product and could still sell stock.

So where are these massive profits in Novell? Novell also had to sell out. Novell also could not compete against competitors whose product cost them nothing. Maybe SCO should have sold out to Oracle for pennies on dollar. But instead, SCO decided to survive. No one can blame them for taking the only financially viable option - protect the value of their license.

Others are saying that SCO should have burned a big buck license - and declare it valueless. What company simply burns their only asset? No SCO stockholder would have accepted that. SCO was clearly blindsided by something that nobody saw coming - Linux. SCO could never stay solvent on the Red Hat model. SCO already had too much invested in the Unix license. The resulting lawsuits decided one thing. The license that SCO bought had zero value. In business, that was a severe wake-up call to all companies. But again, the Silicon Valley created new standards for business – as confirmed by the resulting legal resolutions.

I have sympathy for the SCO stockholders. They had no reason to expect that a massive freight train would hit them. Without that license, SCO could not survive in the Unix business.

AT&T brought effectively a similar lawsuit against (Unix derivative) BSD in 1993 and lost.

http://www.robotwisdom.com/linux/timeline.html

1991, Sep: linux 0.01

1992: Jan: Linux 0.12 = 0.9

1992: 22 Jan: 1st Linux FAQ

1993: Novell buys "Unix" (USL = Unix Systems Labs) from AT&T (for $332M)

1995: SCO buys "Unix" from Novell (for 6.1M shares of SCO stock) (street val. $100M I've heard)

2000: Aug: Caldera acquires (parts of) SCO

http://www.linux.org/news/sco/timeline.html

2000, Dec: The part of SCO not purchased by Caldera is renamed Tarantella

2002 Aug: Caldera changes name to SCO Group. They state that they are going to concentrate on their Unix development.

http://www.dvorak.org/scotimeline/

2003 Jan: SCO claims they want to find out if there is SCO intellectual property in Windows, Mac OS X, Linux and versions of BSD. McBride singles out Mac OS X: If you pull down (Mac) OS X you'll see a lot of copyright postings that point back to Unix Systems Laboratories, which is what we hold."

2003: Caldera/SCO announces the filing of $1B lawsuit against IBM

No court would accept that if management made no effort to protect the company's only asset. Every reasonable jury would have ruled 100% against SCO management if it had just given up.

Besides, the resulting lawsuits were necessary to establish the legality of a whole new business model. Sooner or later, someone was going to have to sue - as SCO did - to establish the legal credibility of that freeware Linux business model.

So who gets sued? Management and BoDs (individuals) - or business sues business. The later lawsuites were far more productive for America because it confirmed the integrity of the Linux business model.

Again, one can only have sympathy for SCO stockholders who did nothing wrong - were even using a well established and proven business model. What other industry was completely overturned by something so simple as Linux? None that I can think of.

Nobody can fault a company for doing what all companies and managements are required to do - survive. That requirement is a benchmark of all businesses. Even employees lives must be destroyed if necessary (ie firings) because even employees are secondary to that #1 principle - survive. SCO simply had little if any other options.

TW, did you miss the part where Caldera, before they bought Unix from SCO, was a Linux distributor?

Also, it appears that SCO is reluctant to sow the code they allege is being infringed upon. How crazy is that for a lawsuit?

From here
So when they are challenged on what they say, they change the story.

Juuuuuuuuuuuuuuuuuuust like tw.

Yes, but how is that relevant? I don't know how much Caldera spent, but SCO certainly never received anywhere near what was spent to buy Unix from AT&T. (BTW, that hyperlink only goes to a search page). Did Caldera suddenly become profitable because they owned Unix? Of course not. It was bought in a fire sale - probably so that Unix licensees could still obtain support. I never followed it that far. Early on, SCO was desperately making personal appeals to major Japanese UNIX users using code copies to prove 'piracy'. Whether their case had merit was being lost upon me in the apathetic response. At that point, SCO's future (to me) looked dim.

Again, it matters little whether SCO's case was winnable. I am most certainly not making that claim - as implied by the above citations. SCO was in an unenviable position where SCO management had no options. Notice: no where do I defend the merits of SCO's case. Never once did I even try. If their case had zero merit, then it would have been thrown out of court. If SCO's case had enough merit to file, then SCO management had no choice but to file. Any case with only enough to maybe save the company - then they were obligated to file suit - even if SCO management regarded that lawsuit as frivolous.

No one can fault management for doing what was required to meet a primary obligation - survive. I am not disputing that SCO could have won the case. That is completely irrelevant to everything I have posted. Notice what I keep saying: I have sympathy for SCO and their stockholders who were blindsided by a freight train that nobody could have seen coming. Management did what was necessary - and required - for interests of those that management works for - stockholders. If management had not done so, then management must be sued by the stockholders. And stockholders would have won.

Did Caldera suddenly become wealthy from owning Unix? No. Again, without a legal victory, SCO's Unix ownership had near zero value. The stockholder's money spent to buy Unix only had value if SCO could win a lawsuit. SCO couldn't. No one can blame them for trying to save the company. They were only doing what all management in that position is required to do. As bad as you might think their actions, one must also have sympathy for them. They had to file suit to survive - SCO management had no other option other than to lie down and be personally bankrupted by SCO stockholders.

As a guy named Tony once said, "Its only business".

Just because a case is not automatically thrown out does not mean it has real merit, only that it has met a very minimal standard. In a technically complex case, especially one where 'hundreds of lines' out of 'millions of lines' of code are involved, a judge would almost automatically have to allow the case to proceed since s/he would have no real mechanism for judging the merits. SCO's incredibly restrictive NDA would make if very difficult for the defense to find rebuttal experts, which might be one reason for the NDA.

If management of every troubled company followed the standard of feeling duty bound to pressing tenuous, if not outright frivolous, lawsuits as a last ditch effort to stave off disaster, the already overburdened legal system would grind to a halt. The only reason SCO was able to proceed with theirs was because of venture capital funding and selling shares publicly.

I can very well blame them for their method the same way I can blame a man who holds up a liquor store to pay for his child's medicine. The motive is not a justification of the act.

Considering your past views of management, you are being very sympathetic to a group of uber-MBA types who bought rights to a product they did not create and stretched those rights beyond what almost anyone else, including the people who sold them those rights, believed they had.

If I were to buy a Sekhem-Scepter at an auction, it wouldn't make me King of the Nile. Buying UNIX at the 'fire sale' does not automatically give SCO the right to assume that LINUX was infringing. SCO did not create the software, so it probably couldn't even determine that the software was original to UNIX.

After all these years, I still cannot find an independent verification for SCO's claim.

You are correct, though, TW. If management filed suit just to file suit, with no real expectation of winning, then they have at least won the battle. They temporarily drove the stock price of SCO up by at least a factor of twenty, and caused enough Fear-Uncertainty-Doubt among the business community to stall adoption of Linux, and made a few bucks along the way shaking down businesses.

The insiders have probably long since cashed out now and retired to a warm place which is unfortunately not Hell.

The management of SCO and probably every other company in SCO's situation may just agree with you. And yet they all have no choice. Lawsuits are that routine because none of those managements have a choice. If they file any case that only has enough merit to not be thrown out, then they must proceed with that lawsuit. The alternative is that any management that does not perform every legal act to promote their case - not matter how frivolous - must be sued by stockholders into bankruptcy.

Again, the principle is quite blunt. The company must do anything legal to survive. And yes, the courts are chock full of such cases as they have always been. I held evidence where one company patented how switches were pressed and responded to. I had to maintain code that showed I had programmed that more than ten years earlier. And the twist? Company that was doing the suing was also replacing me in the company that was being sued. Frivolous? Yes. These cases that frivolous - far more frivolous than SCO's case - are that routine.

Again, every SCO executive may agree with you 100%; their defense of Unix license was that frivolous. And again I use that phrase ... I have sympathy .... for SCO's management and stockholders. They were completely blindsided by Linux AND they had to do anything legal to save the company. They had no choice.

You may find it frivolous. But things far more frivolous have ended up in court. SCO had no choice. A company must do anything legal to survive. There is no way around that business principle. If SCO management did not file, then stockholders had every right to sue management.

More interesting is what SCO's president did in a desperate attempt to save his company. He spoke fluent Japanese. So he took source code into offices of major Japanese corporate presidents in a desperate attempt to convince Japanese corporate presidents that Linux was pirated code. If anyone could have made the case, SCO's president could have. Last I heard, Japanese response was apathetic. But again, SCO's president had no choice. He had to do anything so that SCO would survive as required of all corporate executives.

My sympathies for SCO manageent and stockholders. He was fighting an almost impossible task that no one ever saw coming. He was required to do that for his stockholders no matter how futile he perceived the fight. Stockholders were also blindsided by something completely unexpected. Notice THE fundamental phrase in my every post ... my sympathies for their 'no win' situation.