Investors bailing on SCO stock, SCOX plummets

SCO's ride is clearly coming to an end, thanks to a monumental ruling last week that clarified the ownership of the UNIX copyrights. To briefly recap, federal district judge Dale A. Kimball declared that Novell owns the UNIX copyrights, leaving SCO without a big chunk of revenue and with claims that have been almost entirely eviscerated. The company said this morning that it would press on, attempting to calm investors.

"Although the district judge ruled in Novell's favor on important issues, the case has not yet been fully vetted by the legal system and we will continue to explore our options with respect to how we move forward from here," the company said in a statement.

Investors appear to be bailing on SCO stock, however. At the closing bell, the stock had lost 71 percent of its value over the course of the day, reaching a 52-week low. SCO stock hasn't been a safe bet for a long time, but some investors backed the company in the hopes that its claims would be successful in court.

When SCO first began its campaign of litigation in 2003, the stock climbed from just over $1 per share in February to over $19 per share in mid-September, after SCO filed its lawsuit against IBM and claimed that the open source Linux operating system contained "millions of lines" of infringing code.

The inflated value of the stock didn't last. SCO's stock price began to decline in early 2004 and steadily fell to about $3 in October of that year. After that, the stock price hovered between $3 and $5 per share until December 2006, when the stock price dropped over 40 percent to 93¢ per share after Judge Kimball upheld a previous ruling that threw out 187 of SCO's 294 allegations of intellectual property misappropriation in the company's lawsuit against IBM. The stock price recovered slightly after the December drop and reached $1.50 a share last Thursday before tumbling this weekend on the news that Novell, not SCO, owns the UNIX copyrights. During the day Monday, shares floated around 45¢ apiece. 

SCO's revenue has been in steady decline since the start of the company's legal campaign, and it's unlikely that there is any hope of recovery. SCO's biggest windfall since the start of its legal fiasco has been UNIX licensing revenue collected from Microsoft and Sun, much of which is rightfully owed to Novell under the terms of the 1995 Asset Purchase Agreement.

As Judge Kimball noted in his ruling, it's unlikely that Novell will ever be able to collect on those licensing royalties.