If you follow the tech industry at all, you're familiar with serial lawsuit filer SCO Group
It's tough to imagine, but this quarter's numbers are even worse than last quarter's stinkers. Revenues fell more than 52%. The prior year's $0.33 per share profit turned into a whopping loss of $1.06 per stub. This abysmal mess was "consistent with expectations," according to the release.
Management blamed the slow sales on a "lack of SCOsource licensing revenue." SCOsource is the Linux users' shakedown program. Apparently, no one is paying up. It took in $11,000 last quarter. That's not a typo. President and CEO Darl McBride paid more lip service to "increasing shareholder value," but you really have to wonder about the viability of his vision when his firm's most engrossing initiative brings in less money than the guys who mow lawns in my neighborhood. By the way, McBride was paid more than $1 million last year -- most of it in cash -- to preside over this impending disaster. Click here to see how he's enhanced shareholder value over that time period.
Here's the sad truth: SCO is working hard to erase whatever viability it had as a software provider. It is now little more than a shell -- a lawsuit with a fancy name. We saw this coming awhile back when the company's sugar daddy, hedge fund BayStar Capital, muscled the firm away from its languishing enterprise business and demanded it concentrate on the litigation. A legal victory looks highly unlikely, and even if a decision went SCO's way, the probable remedy would not be money for SCO, but a rewrite for Linux, something the open-source community would accomplish in the blink of an eye.
At 5 bucks a share, with almost nothing available to short, SCO isn't worth much of your investing effort. But it's definitely worth watching, if only as an example of the way a company can be run into the ground, taking investors along.
Fools have had plenty to say about SCO:
- Take a look at the beginning of the saga.
- Beware the wrath of Linux.
- Did SCO dodge a bullet last month?