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

Martin Pool mbp@sourcefrog.net
Wed Aug 13 16:14:48 PDT 2003


On 13 Aug 2003, Don Marti <dmarti@zgp.org> 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.

According to some reports institutional investors are fleeing SCOX and
it is being purchased by speculators.

People are buying it not because they expect to cash in on the $3bn,
but rather because they expect SCO to semi-credibly drag this out for
a bit longer, in which time they can sell it to someone else.  That's
not an unreasonable bet: McBride has been pretty good at manipulating
or purchasing the media.  I'd put it at about 50% that SCO will manage
to pump up their price a bit more before it comes down.

I suppose if anything this means the underlying probability is lower
than 0.037.

--
Martin



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