Feeds

Investor dumps SCO

But the money is ours, says SCO

  • alert
  • submit to reddit

Intelligent flash storage arrays

The major speculator backing The SCO Group's legal jihad against Linux wants its money back. Marin County, California-based equity fund BayStar Capital invested $20m in SCO back in October, confident that the Utah firm had a strong legal case. Now Baystar says SCO has breached the agreement and wants to redeem its investment, which takes the form of 20,000 shares of SCO's Series A Convertible Preferred Stock. SCO doesn't agree, and wants to hang on to the cash. The terms were amended in February.

SCO says that BayStar alleges that SCO breached Sections 2(b)(v) 2(b)(viii) and 3(g) of the February agreement, but doesn't know more specifics. The sections detail obligations for "representations and warranties" and public disclosure. Shares in the Utah company fell 13 per cent today on the news. SCO admitted in October that the focus on its litigation had already damaged its traditional Unix on Intel business. SCO reported that at the end of the quarter ending 31 January, the company had $57.94m in cash and cash equivalents - down $6m from the previous quarter - and $6.67m in securities. Liability in the form of Series A stock was valued at $29.67m.

"Our funds have never taken part in toxic or death spiral convertible financings of any sort," BayStar's managing partner Lawrence Goldfarb wrote in a letter to the Financial Times last month. He wasn't talking about SCO, but critics will judge the metaphors to be appropriate. ®

Related stories

Judge stays Red Hat vs SCO
SCO vs. IBM vs. SCO: Is the end in sight?
SCO lifts skirt but investors recoil
Microsoft encouraged anti-Linux investment shock!
SCO shares keep on sliding

Internet Security Threat Report 2014

Whitepapers

Why cloud backup?
Combining the latest advancements in disk-based backup with secure, integrated, cloud technologies offer organizations fast and assured recovery of their critical enterprise data.
Getting started with customer-focused identity management
Learn why identity is a fundamental requirement to digital growth, and how without it there is no way to identify and engage customers in a meaningful way.
Driving business with continuous operational intelligence
Introducing an innovative approach offered by ExtraHop for producing continuous operational intelligence.
5 critical considerations for enterprise cloud backup
Key considerations when evaluating cloud backup solutions to ensure adequate protection security and availability of enterprise data.
High Performance for All
While HPC is not new, it has traditionally been seen as a specialist area – is it now geared up to meet more mainstream requirements?