Embattled vendor SCO Group dumped by NASDAQ

A lost legal struggle with Linux distributor Novell, an apparently truncated fight with IBM, a bankruptcy filing in September...and now, a NASDAQ delisting. Is there any hope at all left for floundering PC Unix vendor SCO?

The long embattled PC Unix vendor SCO has finally gotten the heave-ho from NASDAQ, some two months after filing for bankruptcy and three months after losing a crucial legal copyright struggle with Novell, a company that's morphed over the years into a major distributor of Linux, a competing breed of Unix software that also runs on PCs.

Starting yesterday, The SCO Group's stock -- previously traded under the symbol SCOX -- no longer showed up in the NASDAQ listings. Public trading of shares of SCO has since resumed through alternate exchanges, though by mid-afternoon Friday, its shares were trading at $0.08 and falling.

For some time, SCO has stirred a lot of rancor among many other vendors -- as well as IT (information technology) business users -- by waging lawsuits against Novell, IBM, and even Linux customers such as AutoZone, based on claims that these companies were improperly using software code owned by SCO.

Yet for many years, SCO enjoyed its own highly loyal customer base, particularly among SMBs in vertical markets such as retail and energy exploration, many of whom found SCO's PC Unix software much easier to use than Novell's SuSE Linux and various other flavors of Linux.

Along its very rocky road, SCO has also made strong efforts to keep innovating with its products, adding new capabilities such as virtualization. In fact, the company released an update to its OpenServer 6 product line just last month.

In a written statement issued this week, SCO officially blamed its NASDAQ delisting on a bankruptcy filing made in September, not long after federal courts ruled Novell -- rather than SCO -- to be the rightful owner of disputed Unix and UnixWare copyrights.

Basically, SCO maintained that it had purchased all rights for these trademarks from Novell back in 1995. But Novell successfully argued that this wasn't so.

The decision in the legal fracas with Novell also seemed to inject a rather huge crimp in SCO's $1 billion suit against IBM, since the IBM case was based on allegations that IBM improperly put SCO-owned Unix code into Linux.

In September, SCO did receive a letter from NASDAQ warning that the company might be delisted as a result of its bankruptcy filing.

According to SCO's statement this week, the company was able to forestall this action until completion of a hearing. But on December 21, SCO received notice from NASDAQ that it would indeed be delisted.

Also in September, SCO got a separate warning letter from NASDAQ, cautioning that SCO would get delisted unless it found a way by March 24 of next year to raise its stock price to at least $1.00 per share for ten days in a row.

At the close of business on Tuesday, SCO's SCOX stock was trading for merely 18 cents a share. But over the previous year, SCOX prices had ranged as high as $2.21 per share.

After applying for bankruptcy protection in September, SCO tried unsuccessfully to sell off its Unix software business for up to $36 million.