Say what you will about The SCO Group Inc.s chances of winning its Linux-related lawsuits, but at least some of its loyalist shareholders and a member of its board of directors believe in it enough to put their money where their lawsuits are.
On Wednesday, SCO announced the completion of a private placement of 2,852,449 shares of common stock to existing SCO institutional shareholders and a member of the companys board of directors. The net result of this was to place $10 million into SCOs hands.
SCO, best known for Linux litigation and its Unix operating systems, continued to lose money in its latest quarter. Pursuing its lawsuits has continued to eat at the companys cash reserves even though its recent efforts to prove its case against IBM have left most observers cold.
The shares were sold to institutional investors at $3.50 per share and to the board member at $3.92 per share. No special warrants or rights were issued in connection with the private placement.
SCOs stock has recently been hovering around the $4.00-per-share mark with low volume. Its lowest mark in the last 52 weeks was $3.22
The company claims that proceeds of this private placement should ensure that the company has adequate funding to pursue its business strategies, including the resolution of the companys existing legal proceedings.
A previous private placement with BayStar Capital II LP for $50 million ended in a squabble over control of the company last summer after months of fighting. This is the first major private capital placement in SCO since then.
“Our current strategies have continued to focus on creating innovative mobile technologies for new customers, delivering reliable Unix products for existing customers and protecting our intellectual property rights for all company stakeholders,” said Darl McBride, SCOs president and CEO.
“This added investment is a vote of confidence by our existing investors that will bolster our efforts over the long term to succeed in the marketplace with our products and continue protecting our intellectual property,” said McBride.
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