I've been seriously thinking about buying some SCO stock. Do I have any great hope for the future of SCO? NO, absolutely none at all. The officers of SCO (formerly Caldera) have embarked on a long path of litigation that claims that Linux source code includes intellectual property that is a part of SCO UNIX and that IBM (among others) is responsible for the presence of the infringing code in Linux. SCO is also suing Novell, AutoZone and DaimlerChrysler over the use of Linux. The actual lawsuit, which has been in discovery for a couple of years now, will probably go to court in November. Wikipedia has as good a synopsis of the case as you will find anywhere. During the early process of the litigation, the price of SCO shares was driven from around $3 to over $20 per share, and insider trading history shows that the officers of the corporation made a great deal of money from this. Shares are now back down to about the mid-threes.

In my opinion, odds are far better than even that SCO will lose the lawsuit. Even if Linux had infringing code, SCO itself released the code in Caldera Linux under the Gnu Public License (GPL), so it may come down to a question of the the validity of the GPL. SCO has characterized the GPL as “Communist” and “unconstitutional”, but it has been carefully crafted, has had the benefit of an enormous amount of legal scrutiny, and will probably stand up in court just fine.

The Directors of SCO have allowed the officers of the company to take the entire company down a path that has marginalized them as an operating system company, destroyed one of their profitable product lines (Caldera Linux), and has placed the main hope for the ultimate health of the firm on litigation that I believe has little chance of success. As we have seen recently in the WorldCom case, directors are now being held personally liable for permitting mismanagement leading to failure of a firm. The job of a corporate director, after all, is to maximize return for the shareholders, and if the company fails due to management decisions made with the full acquiescence of the board, the directors have some responsibility for the failure. Now I am not a lawyer, nor do I play one on TV, nor (for that matter) do I generally have a good opinion of lawyers. But I think that when SCO does lose their case and the company goes belly-up, the directors who allowed it to happen are going to be subject to a class-action suit, and I think I might want to get in on it. So, I guess I need to buy my SCO stock and make my opposition to the company's current management a matter of public record. Then: ca$h in.