[linux-elitists] [SCO] Royce & Associates?

Willy Smith willy@linuxgazette.com
Wed Oct 8 12:25:16 PDT 2003


> Today's fun SEC filing:
>
>     http://www.sec.gov/Archives/edgar/data/1102542/000090630403000292/scox.txt
>
> It would appear that, as of September 30, Royce & Associates LLC holds
> over
> 1.4 million shares of SCO.  There are 13.5M shares outstanding, so Royce
> now owns over 10% of the company.  That's also almost 20% of the 7.5M
> shares said to be in circulation.  The acquisition of so many shares would
> explain a lot about the company's stock price.
>
> Google is not tremendously helpful in this case; they appear to be a
> "micro-cap" mutual fund manager; they are owned by "Legg Mason."  Anybody
> know any more which might give some insight into why they bought so much
> of
> this stock?

>From this page, what they are saying about SCOX doesn't jibe with reality:

http://www.roycefunds.com/commentary/

"Our starting point is evaluating the quality of a tech company's balance
sheet. From there we go on to look at the quality of the company's
earnings and the valuation of its stock. These three elements are our most
important initial metrics, and they are not the traditional criteria used
in the management of most other tech stock funds. We are looking for great
companies with good management teams with sustainable business models that
we can buy inexpensively based on any number of metrics: price to book;
price to cash; price to EBITDA [Earnings Before Interest, Taxes,
Depreciation, and Amortization]; price to cash flow; price to earnings;
price to technology value; price to M&A value; strategic value of assets;
strategic value of intellectual property rights - any metric that we
believe the market will eventually value in a way that is consistent with
what we believe is the underlying, intrinsic value of the company. A cash
cushion tends to be a common denominator of many of our holdings; a high
level of cash relative to market capitalization provides a "margin of
safety" against a declining market or periods of volatility."

Looks more like a big pile of chips on 00.

Regards,

Willy Smith
Editor in Chief
http://WorldWatch.LinuxGazette.com
Costa Rica



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