SCO Group Attracts $50 Million in Placement
By Ronna Abramson
Staff Reporter
10/16/2003 06:47 PM EDT
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SCO Group (SCOX:Nasdaq - commentary - research) announced Thursday after the close that it nabbed $50 million in private funding, buying more time and money in its fight against IBM (IBM:NYSE - commentary - research) over the Linux operating system.
SCO said the private investment was led by BayStar Capital, a Larkspur, Calif.-based investment fund that specializes in equity placements in publicly traded companies.
The SCO investors receive nonvoting Series A preferred shares, convertible into common stock at a fixed conversion rate of $16.93 a share. That was the average closing bid price for the company's common stock for the five previous trading days prior to closing the deal.
Shares of SCO declined 61 cents, or 3%, to close Thursday at $19.89 before declining slightly to $19.60 in after-hours trading.
The private placement gives SCO a financial boost in its legal battle against IBM, bringing the company's cash balance to $61 million. Earlier this year, the Linden, Utah-based company sued IBM, charging that the technology behemoth breached a contract by misappropriating SCO's UNIX Code in IBM's Linux business.
Upon conversion, BayStar will own nearly 3 million shares of SCO stock, or 17.5% of shares outstanding. The firm's past investments include Commerce One (CMRC:Nasdaq - commentary - research), Roxio (ROXI:Nasdaq - commentary - research), and both Sirius Satellite Radio (SIRI:Nasdaq - commentary - research) and XM Satellite Radio (XMSR:Nasdaq - commentary - research).
thestreet.com
un freaking believable!!!! |
