LWN: Comments on "SCO Group to be delisted"

SCO Group to be delisted

ayeomans — Fri, 25 Feb 2005 10:14:53 +0000

Seems a great way to hide the stock history. At least you can still run comparisons.

SCO Group to be delisted

freemars — Thu, 17 Feb 2005 21:49:04 +0000

Amazingly, SCO stock closed the day above $4.00 -- Yahoo ticker

"If I were an investor"

cpm — Thu, 17 Feb 2005 20:53:55 +0000

Well said.

"If I were an investor"

gsc — Thu, 17 Feb 2005 19:02:36 +0000

Post of the day.

How does delisting affect shorted stock?

jwb — Thu, 17 Feb 2005 18:36:12 +0000

Most retail brokerages have strict rules about shorting. For example many of them will not allow you to short a stock with a share price under $5. These rules are mainly in place to protect the broker from lawsuits. The online retail brokerages are a kind of padded kindergarten playground for investors. You can have a little fun, but it's not really dangerous.

SCO Group to be delisted

jwb — Thu, 17 Feb 2005 18:33:14 +0000

NASDAQ will add an 'E' to the end of their ticker, so it will become SCOXE. Rhymes with GOATSE I guess.

How does delisting affect shorted stock?

iabervon — Thu, 17 Feb 2005 18:13:49 +0000

Essentially, in order to sell stock short, you have to find someone willing to hold onto that amount of stock who is willing to sell it to you at the given time for a huge amount of money if necessary. Otherwise, the market risks there being a time when your shorted stock comes due and the total amount offered for sale is less than your obligation, in which case it wouldn't be possible to fulfill the requirements, regardless of money (since there's a limited amount of stock total, and not all owners are entertaining offers at all at any particular time). Note that the amount you can short is limited by the amount in reserve for covering shorts, not the amount on the market, because the stock on the market can be bought and held by people not paying attention.

What happened with SCO towards the beginning is that it was sufficiently shorted that it couldn't be shorted any more. In fact, SCOX later went up precipitously at times, when the shorts came due and there wasn't enough stock on the market to cover them at the market price. The issue isn't really that you aren't allowed to short bad stock, but you can't short the same thing that everybody else is shorting, or things that brokers aren't holding for this purpose.

How does delisting affect shorted stock?

doodaddy — Thu, 17 Feb 2005 17:25:17 +0000

IANAStockBroker, but I tried to sell it short on day 3 and wasn't allowed (by my automated, on-line broker). I think there are rules against selling some piss poor stocks short or something.

SCO Group to be delisted

dmarti — Thu, 17 Feb 2005 16:56:44 +0000

What does this mean for the SCOX board at finance.yahoo.com? Do delisted companies keep their Yahoo boards?

"If I were an investor"

pyellman — Thu, 17 Feb 2005 16:25:31 +0000

"It is clearly a red light," said Laura DiDio, an analyst at The Yankee Group in Boston. "If I were an investor, I would be very concerned."

That's interesting. If _I_ were an investor, and _I_ was considering a course of action, _I_ would be looking for someone to sue or press charges against, and the name "Laura DiDio" would be quick to pop into _MY_ mind.

Peter Yellman

How does delisting affect shorted stock?

Duncan — Thu, 17 Feb 2005 16:12:54 +0000

So... what effect does delisting have on all those folks that have sold
SCOG stock short? That's of some signifcance for something as highly
shorted as SCOG is, but I haven't the foggiest whether this means they'll
never have to worry about being called upon to actually supply those
stocks, or if it'd simply make it harder to procure them if so called
upon, assuming they find some over-the-counter market to trade on.

Duncan