Rupert Goodwins' Diary

Thursday 17/02/2005Meanwhile, back in Utah, SCO is in rough water. I'd just about resigned myself to a long summer of nothing much happening as the infinitely slow business of American justice builds imperceptibly towards an actual trial sometime next year.

Thursday 17/02/2005

Meanwhile, back in Utah, SCO is in rough water. I'd just about resigned myself to a long summer of nothing much happening as the infinitely slow business of American justice builds imperceptibly towards an actual trial sometime next year. But it may not get that far.

First, SCO's parent company, Canopy Group, is in the middle of internecine warfare. The top execs have been booted out, there are suits and countersuits flying over who did what to whom and where the money went, and there's a feeling that some of this nastiness is fallout from the way SCO has been, er, managed of late. This is the sort of thing that gets very interesting very quickly, as each side dips deep into their store of company secrets to find more mud to fling.

Second, as of today SCO is heading for a delisting from NASDAQ. It hasn't made the right filings in time concerning various aspects of the company finances -- share options, basically -- and it's poised to be booted off by the end of the month. It might not: there's a hearing to go and there's still time to make amends, but this is the sort of disaster that can only accelerate the demise of a company already in trouble. Why hasn't it filed? Ask the auditors. They're refusing to pass the paperwork. Could be any number of reasons: none of them, however, are good.

Third, the company's not selling any software. This hasn't seemed to bother them too much of late -- after all, when you're going to win billions of dollars in the court, who needs to flog boring old programs -- but when you're going to need someone else to throw you a lifeline, even a little hint that you might be a going concern helps.

SCO's best chance of survival would be a wholesale change of management at the top followed by a negotiated withdrawal from the lawsuits. The delisting alone is excuse enough to dump Darl, and I'm sure you can think of a few other factors that should be taken into account. Otherwise, we may just see the company collapse -- mass resignations, possible legal action, insolvency -- in any one of a number of interesting ways.

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