SCO closes BayStar deal

Stock hits new low

By Andrew Orlowski • Get more from this author

Posted in Financial News, 27th August 2004 09:24 GMT

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The SCO Group's stock hit its lowest point since the start of its anti-Linux campaign after settling a truce with one of its major investors. SCO has completed an agreement with BayStar Capital that ends an acrimonious dispute between the companies. Marin County-based BayStar invested $20m in SCO last October, but became dismayed by executives public statements and the company's strategy. Not that it lost faith in SCO's plan to extract IP royalties from Linux companies; quite the opposite: BayStar believed that SCO should drop its residual UNIX™ business and concentrate on licensing.

Earlier this year BayStar announced it wanted to trade in its preferred stock, the first time in six years the capital firm had asked for its money back. In a statement BayStar said that it had successfully completed the peace settlement outlined last month and no longer held preferred stock in SCO. For its part, SCO said it had been putting cash in an escrow account for the eventuality. The other major outside investor in the SCO Group, Royal Bank of Canada, bailed out earlier this year with BayStar picking up the preferred stock.

SCOX finished at $3.60, higher than its level before its anti-Linux campaign began in Spring 2003, but a long way short of the $20 peak it reached when BayStar's investment was unveiled last Fall. ®