It's late summer,and yours truly is seated amongst the hayfever-stricken masses in a doctor's office waiting room in Myrtle Beach, South Carolina. Exactly what was afflicting me escapes my memory at this time.

Anyway, I decide that it is due time for a lozenge, so I take one out of my pocket and begin to open the plastic wrapper without giving it a second thought.

I feel inclined to explain here that, unlike every upstanding mammal with opposable thumbs, I do NOT use my hands to open said lozenge. I use my teeth---a habit I have had since 4 or 5 years old..

I hadn't even gotten my canines around the wrapper when I hear a gasp of utter shock and disgust coming from the seat beside me. I turn and see an elderly woman of about eighty staring at me, aghast.

Her: Did...did you open that with your TEETH?
Me: Well, I, yeah, uh.....
Her: Don't DO THAT! D'you know what that DOES to your teeth?
Me: (unintelligible babbling of confusion)
Her: You'll be sorry when you're my age...(unitelligible babbling of senility)

That last part was terribly cryptic, partly because I noticed that this woman herself had no visible teeth.

I looked at my lozenge with fright; a forboding sense of doom. Could it be? Was this poor woman, now in the winter of her years, suffering from a grueling lifetime of endlessly opening plastic wrappers with her teeth?

Most likely not. Even so, I awkwardly finished opening the lozenge with my fingers.

So, I was sitting in this bar...

When I picked up this leaflet about covered warrants, which led me to looking at going short against SCO Group stock.

In case you don't know, a "short position" is - in essence - a bet that the security in question will fall in price; a covered warrant is a derivative that grants the right to buy or sell a security at a specified price - the "exercise price" - like a flexible option contract. As noted by Amoeba Protozoa under Option, options are bad mothers. It's probably important to note that SCO Group, formerly known as Caldera adopted their current name after purchasing SCO Unix from The Santa Cruz Operation, the original SCO, now renamed Tarantella.

What are SCO Group playing at?

So, as you may know, SCO Group allege that everyone who has a copy of linux of or distributes it is infringing their copyright and owes them big money. Upon this announcement being issued, the price of SCO stock (Listed on NASDAQ) jumped several hundred percent, but has since declined, although it still remains way above where it started.

The reaction

The open-source community has on the whole regarded the affair with derision; the NASDAQ clearly regarded the news as fantastic; SCO customers are reported as believing that this confirms that SCO is committed to its unix products; the same media report that various analysts believe that SCO could win this and blah blah blah.

Many people have suggested that this is part of a strategy to have themselves bought out by one of their rather more solid rivals, although company chairman Darl McBride currently denies this, on the grounds that they are now in a "strong position". The reality is that they have managed to attract license fees from Microsoft, which already represents a significant economic rent realised as all they have done to their intellectual property is draw attention to it, rather than enhanced it, repackaged it, or delivered it in new ways, except perhaps with the barrel of a gun.

Lies and Rumours

The current price of SCO stock reflects sentiment regarding possibility of a win (creating upward pressure), possibility of their being wiped out as a result of losing in the courts (creating downwards pressure), and crucially estimates of their ability to generate money by actually selling goods and services. Crucially, SCO has gone from being a company with a nervous customer base and some ropey old code, plus a linux business that never took off to one that is seen as actually being invested in its unix product, not only because of the lawsuit, but rather because of the new product platforms that it has launched at the same time as drawing attention to itself by announcing that everyone owes it money.

As Alannah Myles sang, "Between the Lies and Rumours/there's a whole world of mystery", and at present it looks to me - a man from whom you should not be taking any kind of advice, least of all legal or financial - that the price of SCO Group equities reflects what the market considers fair value for a company trading in their unix systems, discounted for the uncertainty in what will happen, as the various other kinds of pressure cancel each other out. In my further opinion, given the fact that Caldera is very much the lame duck of the linux world, the company is overvalued due to people having just noticed them at a time where they have a lot of positive news, which may well be the whole point of the exercise for SCO Group.

Take a roll of the dice...and get back to the point

Given the various conflicting pressures on SCO Group equities, all kinds of interesting things should be happening in the market for derivatives of their stock (or there would be, were there any such derivatives available, which I haven't been able to confirm). The point of holding put-/call- option-like derivatives is to hedge against risk in the movements of the underlying security, in this case SCO Group stock, so derivatives allowing one to fix an upper or lower price for the stock in the time-frame of interest - 2 to 4 years - should be riding high at present, at a significant premium to their intrinsic (exercise) value. (It is left as an exercise to the reader to determine the expected behaviour of options for other time spans).

So, if I want to take a short position against SCO Group, I need to be sure that my chosen option will be well into the money either at, or before, (depending on the exact kind of derivative) the expiry date, or that the market will increase its belief that SCO Group will suffer significant losses, and that stock prices might fall. Picking a highly geared instrument would be an extremely good choice in my case, - in my humble opinion, which is definitely not advice - where a small fall in price - as perhaps due to the bubble that I posit bursting - will lead to a relatively large increase in the value of a put, so that position will be able to take advantage of any downward adjustment in the price of the stock. The supposed advantage depends on uncertainty in the value of SCO not being significantly decreased, as at present any such derivative's value is going to include a relatively large "time value" accounting for future uncertainty: if that uncertainty goes then a (relatively) large part of the value is gone, and to remain valuable the price of SCO group stock will have to fallen to about the exercise price; meanwhile if uncertainty remains, and the price falls, then - as we are considering a geared derivative - a good return should be realisable.


Certain - most - kinds of short position can expose you to unlimited liability, and you should never take advice from some random guy on e2. This is not a solicitation or advice to dispose of any kind of security in any way whatsoever. Always make sure that you understand the investments that you make. If unsure consult a qualified professional.


What's been happening with C-Dawg lately?

September 20, 2003, a Saturday.

I got up bright and early, left my car at the office, and walked down to Leadbetter Beach, where I met up with Jennifer and her sister at the starting point of the 2003 Barbara Ireland Walk for the Cure. We stood around for a while, and finally the organizers got the activities started. There were a few speeches, by the organizer of the walk, by Kathy Ireland, a few others. They gave a nod to Erik Estrada, standing in the crowd, but didn't mention if he's a big contributor or what. One of the speakers was the chairwoman of the foundation that was benefiting from the walk, who gave the obligatory thanks to all the participants, and spoke about how breast cancer was going to be annihilated any day now. Then she made a remark that really chapped my hide.

Of course, a charity like this needs legislative support.
Yes, of course; it would be impossible for people to work together for a good cause without the benevolent hand of government to guide them. Our California Assemblywoman, Hannah-Beth Jackson, then ascended the podium and gave a short speech, not mentioning any particular efforts she's undertaken in Sacramento on the foundation's behalf, but she did brag about the bill currently pending that would outlaw the sale of soft drinks and snack foods in public schools. The crowd became practically apoplectic with applause. God forbid the parents of our children should take responsibility for their upbringing. Okay, so I'm old fashioned.

Fortunately, I had an eleven mile walk ahead of me with two charming young ladies to put it out of my mind. Eleven miles was actually two miles short of the endpoint, but that was when our route passed East Beach, so I took my leave to play volleyball with Edward.

September 24, 2003, a Wednesday

Finally, after three months and more money than I would have thought, I'm finally able to begin serving my employer and the people of California as a Notary Public. Each of the next two days, NetLojix needs one oath administered. That's twenty dollars saved for the company. If that continues, we'll recoup our investment in about a month.

September 28, 2003, a Sunday

I resigned my Everything2 editorship today, after serving for about 6 months. There was a minor event that triggered this, which added to a few other things that I'd been unhappy about. But I'm not sure I was very good as an editor, anyway. To a degree, I was uncomfortable speaking with the rubric of authority. The more important aspects of editing on E2, such as giving advice to noders both on their writeups and how the site works, I will continue to do of course; I just won't have a $ advertising me in the Other Users nodelet.

Also today, I finally saw the movie Magnolia, which has been sitting in my living room for —wow!— almost a year. Weird, fun, worth watching. I don't think there is any problem in reading the reviews in that node before sitting down in front of the TV.

September 29, 2003, a Monday

Edward agreed today to accompany me on a vacation to New Zealand. What could be better than that? Then this evening, as I feared, my boss said that he couldn't allow us both to take extended time off of work at the same time. Boo hoo. What am I going to do about that?

There is nothing quite so beautiful as stumbling to your second home, stomach sated with good wine and good company, to discover a girl, your girl, waiting on your second stoop, wearing your shirt, smoking your cigarettes and waiting to let you in for the night.

It'd be nice if I didn't have another home to be at in the morning.

Whoa man, this is crazy

It may seem to most of you that I bitch a lot in my logs/nodes whatever you want to call them. Here is why: Things that outrage me, just might outrage other people. Maybe they can relate. Maybe not. It doesn't matter to me. If you don't want to hear it, here's an idea: Don't read it. It really is that simple. Thank you for your time. I hope you all enjoy the write-up for today.

Oh you aren't going to be able to believe this shit. Hold onto your seats kids. This is a doozy.

I didn't think she could piss me off anymore. She being a co-worker that I don't care for. At all. Actually, hatred would be a better word for it.

Since I make it a point to ignore her existence and go on about my day in my cube, I thought she would just go away and not talk to me. It is obvious that I don't like her. Not talking to me at all is a-ok with me. Her real name I will not divulge but her nickname is Ellie Mae.

I was wrong.

She is back to her old "I am so much better and smarter than you even though I use words incorrectly and say the term 'as a matter of fact' every 5 seconds to make myself sound smarter" ways. And I think that she has gotten worse. Worse I tell ya!

When I got to work this morning, around 9:30 I realized that it was time to take the good ol' birth control pill. So I take it out and everyone knows what Birth Control looks like. It's a little dialy jobber and you have to turn the thing and it is obvious what you are doing or taking.

This doesn't bother me. I don't try to hide it. It's a pill, I have to take it. I'm a grown ass woman. I can take birth control without being stoned to death or burned at the stake. And it is the year 2003 for christssake.

So I take out the contraption and take my pill. Moments later Ellie Mae has to chime in (in a whisper), "What are you taking birth control for?"

Do what? So I say, "I don't see how that is any of your business." Then she says to me, NO! SHE says to ME! "I just don't think a girl your age should be on birth control. It sends the wrong idea to men."

At this point, I was fuming. I say, "This coming from the girl that had a child out of wedlock. Maybe you should have taken a tip from all of us girls that 'give the wrong idea to men' and put your ass on birth control." Then she goes into, "It's a form of abortion..." Dear. God. I knew she was a bible thumper, but shit!

I hate people that say it is a form of abortion. The only thing that birth control does is prevent an egg from forming so there is nothing there to fertilize. Anyway, I then said, "Well you may think it is wrong, but at least I don't have a bastard child running around."

How unbelievable is that shit that she says to me? I mean seriously! Can you believe that? She barely even knows me and she knows that I don't even like her because of this uppity shit she pulls out of her ass all the time. SHE is going to lecture ME on birth control. The same bitch that says that women shouldn't be expected to cook meat. The same bitch that won't even learn how to change her own tire b/c she says, "That means I don't need a man to do things for me." Uhh, you don't need a man to do things for you. Anyway, it enraged me. I had to vent. Thank you for your time.

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