[linux-elitists] possible web doodad -- the "SCO's chances calculator"

Mikael Pawlo mikael@pawlo.com
Wed Aug 13 13:51:39 PDT 2003


At 1:35 PM -0700 8/13/03, Don Marti wrote:
>The collective wisdom of the world's financial markets says that
>SCO has a probability of winning of about 0.037.
>SCO stands to collect $3 billion if it wins its case against IBM.
>As of 20 minutes ago or so, SCO's market cap is about $112.5 million
>greater than its book value.  Do the math.  (I'm ignoring time value
>of money here because I'm assuming that SCO would get interest if
>it won.  I'm also ignoring any possibility for future SCO revenue
>other than the lawsuit.  Anyone have a better model?)
>If there were one person in the world who had access to a stockbroker
>and believed that SCO had a better chance of winning, that person
>would be buying and driving up the price of the stock.

You can not calculate like that because - as you state - you miss out on any other discounted values in the stock. But you may take today's value and subtract the value the day the claims reached the market place to get value from where you may make your calculation. Well, that is also a flawed model to be honest, since there might have been - for example brand recognition values or future sales values discounted in the share price on the day of the disclosure of the claim but those values must be tarnished today. That is - if the market (as in stock traders) understands this. To compensate for this you may calculate all goodwill by taking the share price minus booked value on the day of disclosure. This goodwill should probably to some extent be added to today's stock price if you use your model (this is because the increase in the share price must be higher due to the loss of brand status, future sales etc). But then of course some Fortune 500 companies (not disclosed which ones) are contemplating entering into the SCO's licensing program... which would... gahhhh!

Yeah, we got our share of Gordon Gekko in Sweden when I was fifteen.

Regards,

Mikael

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