SCO Tumbles As Court Says Novell Controls Unix

Shares of SCO Group (SCOX) collapsed Monday after a federal judge in Utah on Friday ruled that Novell (NOVL), and not SCO, is the rightful owner of the copyright to the Unix operating system. SCO for many months had been trying to make the case that it controlled Unix - and that the open-source Linux operating system contains elements that violated its Unix copyrights.

SCO has a lawsuit on this issue pending against IBM (IBM), and had threatened to sue others over this issue. SCO’s stance has made it the most hated company in the technology business; the massive slide in its stock price Monday likely made a lot of people happy.

SCO Monday was down $1.13, or 72%, at 43 cents, reducing its market cap to just $9.2 million. Novell was up 28 cents, or 4%, at $6.28. Interestingly, shares of Red Hat (RHT), the leading player in the Linux market, were down 21 cents to $21.77. While SCO’s assertion that Linux users were violating SCO’s Unix copyrights was certainly a threat to Red Hat, the Street may see some ongoing risk in the court’s finding that Unix is controlled by Novell, a competitor to Red Hat in the Linux market.