SCO Returns From a Near-Death Market Experience

By Steven Vaughan-Nichols  |  Posted 2005-04-19 Print this article Print

After skirting being delisting from the Nasdaq, the SCO Group is back on the market with its original ticker symbol: SCOX.

SCO came close to being delisted from the Nasdaq SmallCap Market, but its back to trading as usual as the company has been in told that its back in full compliance with the Nasdaq filing requirements.

The SCO Group Inc. has long battled IBM, Novell Inc. and other companies over its IP (intellectual property) and contractual claims.

More recently, the Lindon, Utah, company has seen its revenues and net income decline because of poor sales of its Unix operating systems: OpenServer and UnixWare.

On Tuesday, however, the company finally received some welcome good news: It received written confirmation from the Nasdaq Listing Qualifications Panel that it has now met all the requirements to continue to be listed on the Nasdaq under its ticker symbol "SCOX" when the market opens Thursday.

The business had been in danger of being delisted because it has failed to file its 2004 annual report, Form 10-K, for its fiscal year ending Oct. 31, 2004, in a timely fashion.

Click here to read more about SCO fighting the threat of being delisted. The Unix company had already missed several deadlines. Its annual report was due 90 days after Oct. 31. SCO was granted an extension to Jan. 31, but it missed that deadline as well.

While SCO was not immediately delisted, its trading symbol, SCOX, was given an E, making it SCOXE, to show would-be stock buyers that the company was not in compliance with Nasdaq regulations.

On Feb. 28, SCOs management, the Audit Committee of the Board of Directors, and KPMG LLP, SCOs auditors, agreed that, due to accounting errors during 2004, SCO could no longer rely on its financial statements for the 2004 quarters ending Jan. 31, April 30 and July 31, and would have to restate them. To read more about SCO restating its quarterly financial statements, click here. Despite these accounting difficulties, SCO insisted that the net result of the restatement would be a wash, with no net change to the companys bottom line.

The company then made its case to the Nasdaq Panel on March 17 that once its accounts had been audited and verified, it would be able to get its fiscal paperwork in and thus comply with Nasdaq regulations.

Since then, SCO was able to file its reports. Most recently, on April 13, SCO filed its quarterly report for the quarter ending on Jan. 31. While SCOs revenue fell 22 percent to $8.9 million from $11.4 million that quarter, it nevertheless is now in compliance with all Nasdaq regulations.

Accordingly, the Nasdaq is restoring SCO to the markets good graces on April 21.

SCO is also continuing to look forward to the release of its new version of OpenServer, Legend, in June. In addition, SCO has continued to build up its partnerships. Most recently, the embattled Unix company announced a deal with the global supply chain distributor Synnex Corp.

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Steven J. Vaughan-Nichols is editor at large for Ziff Davis Enterprise. Prior to becoming a technology journalist, Vaughan-Nichols worked at NASA and the Department of Defense on numerous major technological projects. Since then, he's focused on covering the technology and business issues that make a real difference to the people in the industry.

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