SCO plans stock buyback in attempt to arrest slide
SCO plans stock buyback in attempt to arrest slide
Faced with a worrying dip in its share value, the SCO Group has announced plans to buy back up to 1.5 million shares.
The company's stock has tumbled recently, closing at just US$8.99 on Monday, less than half the value of its most recent peak on October 15 last year, when the shares were trading at US$20.50.
This has led to the decision by the company's board of directors to authorise managers to purchase up to 1.5 million shares over the next 24 months.
SCO Chairman Ralph Yarro tried to put a positive spin on this latest development at the company, which is involved in numerous legal battles with Linux vendors IBM and Novell and the Linux user community over what it perceives as intellectual property violation of its proprietary Unix source code in the open source operating system.
"This action reflects our strong belief in the fundamental value of our intellectual property and core business. At current prices, we believe our stock represents an attractive investment opportunity and that this action reflects our ongoing commitment to improving long term stockholder value. We believe we will have sufficient capital resources to undertake this buyback program and continue to pursue our strategic initiatives."
The ongoing court case against IBM, whom SCO is suing for $5 billion over claims that it illegally moved Unix code into Linux, has had a particular bearing on SCO's share price.
Since March 3, when the presiding judge in that case ordered SCO to back its claims relating to IBM, SCO's shares have fallen from $13.42 to $8.99 – an alarming dip in less than a fortnight.
SCO's failure to get the Linux community to buy their Unix licenses has also got investors jittery, and doubts persist over the viability of the company's software business.
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