When investment writers come out with stuff like this, it's no wonder
that that SCO can survive...
IT Investor's Journal: An analysis of SCO Group
Monday February 16, 2004 - [ 02:00 PM GMT ]
By: Melanie Hollands
I might own SCOX at some point, but for now I’d be inclined to stay on
the sidelines since it looks too early to buy into the story. For the
time being, I have a negative bias on the stock until it reaches a more
attractive entry level. The stock has been quite volatile recently, and
I expect more volatility for a while...
[just for a while...?]
But a solid up-move in SCOX would depend on a number of factors:
increasing Linux adoption rates [!], growing IP licensing revenues, and
the outcomes of various pieces of litigation SCO has pending with other
companies (specifically award and/or settlement amounts). If these
things happen in SCO Group's favor [in which parallel universe?], then
it's possible the stock price could move up...
For those that care to own SCOX, I see the longer-term investment story
as being revenue-driven... [is she mad?]. In particular, it's a
revenue-growth story driven by growth in IP license sales. That said,
SCO's ability to sell UNIX runtime licenses to Linux end-users is still
in early days ... growth rates should gradually increase over the next
four to six quarters. Best-case scenario: IP license revenues could
represent substantial revenue growth for SCO, and fiscal year 2005 could
be substantially higher than consensus estimates.
While the stock has been quite volatile recently, management seems
positive about their current business, legal team and legal strategy,
and prospects for significant license and earnings growth in fiscal year
2004. However, I don't consider a "positive tone" from any company's
management to be a prudent basis for an investment decision, since such
optimism frequently turns out to be little more than that.
There are risks to the stock price... The SCO versus IBM lawsuit might
not go away anytime soon...
[So, some realism there - but here's the one that made me laugh out loud...]
....if SCO Group's various lawsuits were to result in reduced demand for
Linux, from both current and potentially new large enterprise customers,
then that could be negative for Linux-related stocks such as SCOX.
http://management.itmanagersjournal..../2152249.shtml
