SCO Backer BayStar Cuts Back Its Stake
Particularly displeased with SCO's handling of the IBM lawsuit, BayStar in April demanded that SCO either change management or refund its original $20 million investment. Soon after that demand, BayStar assumed $20 million of Royal Bank of Canada's investment.
The agreement restricts BayStar from unloading the common stock all at once in the event SCO's stock value increases rapidly.
Ultimately, BayStar decided to settle rather than sue. "BayStar feels the transaction is positive for all parties," a company spokesman says. SCO couldn't be reached for comment Wednesday, but the company has postponed the announcement of its second-quarter financials in order to address this latest transaction.
BayStar's uneasiness with SCO surfaced publicly in April when BayStar expressed a number of concerns. The investment firm first wanted SCO to add to its management team people skilled in the areas of intellectual-property management, litigation, and the overall running of a public company.
A second concern for BayStar had been SCO's unwillingness to focus on its greatest area of shareholder value: its year-old, multibillion-dollar lawsuit against IBM. BayStar was also concerned about SCO's undisciplined approach to communications with the media and the public.
*This story courtesy of InformationWeek.com.