3SOF

Pretty bad close today  ... Saw it at 25.20 and thought about selling half of my position for a quick 25% profit in 3 days but didn't pull the trigger... wondering what to do now.  Not quite an inverted hammer but pretty close to one on decreasing volume.  AH trading looks to be down a bit as well.  Any thoughts?

Sold DIVX yesterday at 24 and bought back today at 21.01, saved a few bucks, but its been a rough 2 days in my other stocks 

Cramer just talked about DIVX and mentioned ringing the register a bit, though he still seemed long term bullish on the stock.  Does seemed to have caused a bit of weakness in the stock after hours, down 3.8%, hopefully it rebounds tomorrow.

Update:
DIVX had quite a correction on the last few sessions, although I think this is kind of normal on a IPO play like this...
Several reasons may be appointed for this correction under a good market environment, Cramer suggested selling after the recent gains and that caused some heavy sellings, but mostly there are a lot of short term players taking out quick profits.
The chart so far reminds me (on a different scale) the first trading days of GOOG back in 2004 (second chart in attach).

Volatility was expected, and I truly believe that DIVX will turn up into a great mid-term play, despite some short term noise.

Trading Plan:
Hold DIVX

Best regards,

Update:
No special update for DIVX, apparently some positive reaction on the low $20s price zone, but still too early to analyse any chart pattern.

Trading Plan:
Hold DIVX

Best regards,

Pretty good article.

uc.

SeekingAlpha
What DivX Must Do To Succeed
Thursday October 5, 6:44 pm ET

Davis Freeberg submits: DivX may be unable to comment on the success of their IPO right now, but the rules that relate to their quiet period certainly haven't kept the markets from talking about their stock. After sucessfully pricing their IPO well above their initial target range, the stock took off after Jim Cramer gave it a Buy Buy Buy on his Mad Money program. What's interesting about Cramer's comments is that despite the difficulty behind understanding the complex revenue structures and technological issues associated with DivX, his recommendation was enough to convince investors to bid up the stock to a 54% gain from their IPO. Unfortunately, the Mad Money crowd can be a fickle bunch and after seeing a healthy sell off near the close on Friday, DivX took a bath on Monday after investors moved to exit the stock.

One of the problems that we will find with DivX is that all it will take is a little bit of interest or lack of interest and the stock can really move. While the market cap currently stands at $745 million, the actually number of shares that are floating in the market is really closer to about $200 million. This means that if good news comes out you can expect that the stock will surge, but with a little bit of pessimism you'll see the stock come crashing down. This makes the company ideal for big money hedge funds that can profit from the volatility, but individual investors need to think twice about their comfort with volatility before considering a company like DivX. Because of the small float, the most important piece of advice that Cramer gave his audience was to make sure to use limit orders with this stock. Limit orders don't ensure that you will end up getting stock, but they do ensure the price that you are willing to pay for the company. This is important with thinly traded stocks like DivX because if demand exceeds supply you will find that the stock gaps up significantly as it takes much higher prices to bring new sellers to the market.

Of course using a limit order doesn't answer the most important question of all and that is what should DivX be worth. This is a question that even the experts can never agree upon and to make things even more complicated, in the case of DivX, there doesn't appear to be any Wall St. analysts that have initiated coverage on the stock.

Part of what makes DivX such a tough company to value is that standard PE calculations aren't very helpful. In fact, assuming that they stayed in just cash for the next year, the interest payments from their IPO proceeds alone would be enough to boost DivX's earnings by nearly 33%. This would normally be great growth for a company, but investors shouldn't be content with just clipping the interest on the IPO proceeds. If DivX was a mature company, a PE ratio would be more helpful, but given their ambitions and their stated plans to use the IPO proceeds for research and acquisitions, you can't count on money market yields to turn this small cap stock into a solid mid cap play. Instead the issue that investors should be asking themselves is what DivX plans on doing with their $145 million in cash and how will this impact the bottom line for the stock. For as cool as their technology is and as much buzz as they may end up getting, DivX's will ultimately need to continue to produce solid earnings and impressive growth for investors to justify paying a premium for the company.

In looking at the company, I believe that DivX has a couple of fundamental weaknesses that they could use their cash to shore up. Most importantly, the company has a high revenue concentration in licensing deals with consumer electronic companies. These deals are fantastic for DivX because they produce high gross margin sales because most of the costs associated with these arrangements have already been paid for with the development of their codec. Unfortunately for investors though, many of these deals are only 1 - 2 years in nature and it puts DivX in a tough position of having to constantly be renegotiating these arrangements in an industry that seems to undergo dramatic shifts on a week by week basis. If DivX can continue to gain in it's popularity, these deals shouldn't be at risk, but if enough people abandon DivX and start using iTunes, Amazon and other VOD solutions, then this could put DivX's licensing deals at serious risk, especially if the CES companies begin to ask themselves whether or not consumers really want the ability to play DivX files on their DVD players.

The key for DivX to maintain their relevance with the consumer electronic firms will be their ability to convince consumers to continue to download DivX files and to demand access to burn these files for play on their DVD players. Right now most DivX files are traded illegally on the P2P networks, but as DivX continues to move legitimate, it will become increasingly important for them to strike partnership deals and for them to demonstrate that there is clear consumer demand for their product.

DivX has clearly recognized this risk to their business model and have spent a lot of energy on developing their Stage 6 internet property. Stage 6 is DivX's own solution to video on demand. Consumers can go to their website and can stream content for free or for a small fee they are allowed to download films and then burn them to play in a DivX certified DVD player. In an effort to help encourage the adoption of DivX technology, DivX has created revenue sharing arrangements for those who upload their independent films to the site. After paying some minimum hosting costs, DivX shares revenue with independent content owners whenever they sell a DivX film on stage 6. The breakdown of the distribution arrangement is 65% to DivX and 35% to the content owners. While I like this aspect of their business plan, I remain unconvinced that stage 6 will be the video on demand powerhouse that DivX hopes it will be.

Consumers have already adopted YouTube and MySpace and given the online competitive environment for video sharing properties, DivX faces an uphill battle in getting consumers to adopt their video sharing site. Without significant mainstream content to sell to customers, DivX will face an intense battle in trying the do it alone business model when it comes to content sales and I think that their focus on stage 6 is a huge distraction from higher gross margin opportunities.

If DivX uses their $145 million in cash to go out and purchase content for the site, it could give web users a more compelling reason to visit stage 6, but it would also crush the gross margins that they are able to achieve by moving the business away from licensing and software revenues and towards content distribution. While it may help to firm up their CES royalty arrangements, there are no guarantees that access to content will even make stage 6 popular with consumers and I would argue that the company should be directing their efforts to better opportunities.

If DivX instead uses their $145 million in cash in order to pursue licensing arrangements with other companies, then DivX could be a much more attractive candidate from an investment standpoint. These relationships could be with the cell phone providers looking to break into VOD or they could be existing partners of the studios who want to make use of DivX software.

As anyone who has tried to negotiate with Hollywood knows getting access to content deals is not an easy process. The studios love to enter into exclusive arrangements and have a clear interest in postpoining the sucess of VOD in lieu of the higher licensing fees they can get from DVD revenues. If DivX chooses the go it alone model and tries to negotiate directly with the studios, then it could be a tough road ahead for them, especially for an industry that is distrusting of technology to begin with.

Fortunately for DivX though, the one ace they hold up their sleeve is the quality of their video codec. Studios may be reluctant to license their content directly to DivX, but when it comes to partners that are already working with the studios, there is a clear economic benefit to the VOD providers to license DivX's technology. If Amazon is having to pay substantial bandwidth costs because the .wma file they using is twice the size of a DivX file, then by giving DivX a high margin cut of their proceeds, they could see substantial savings on their bandwidth costs. No one wants to pay a middleman to distribute video, but on the other hand, if it's cheaper then paying the telecoms hosting costs, then there is a real incentive for people to partner with DivX and to use their technology to save money.

If DivX pours their money and effort into expanding these relationships, they very well could justify their current valuation, but if DivX continues to focus on their stage 6 investment, then this will undoubtably eat into their gross margins and should cause investors to think twice before paying such a large premium for their stock. At a market cap of $750 million, DivX is by no means cheap, but on the other hand, with $145 million in cash, very little debt and an impressive income statement, DivX could be positioned to tap into a multi billion dollar industry, if they can effectively leverage their technology

DivX may look expensive at a market cap of $750 million, but online video is hot right now and it's clear that investors are willing to pay a premium to gain exposure to the industry. With Akamai trading at a premium of nearly 8 times their book value, DivX would need to hit over $34.50 per share before it achieved a similar valuation to Akamai. This doesn't necessarily mean that DivX deserves to trade at such a premium, nor does it mean that Akamai deserves to trade at 8 times book value, but it does mean that DivX could still go up quite a bit before their bull run is over.

If DivX fails to capitalize on the expectations surrounding their business, it will be a scary ride for investors, but if you believe that their technology is going to lead the digital revolution, then it may be worth paying a premium for that future growth.

I think the purchase of YouTube.com by Google for 1.6 Billion dollars is helping DIVX today, up over 8% currently 

Quote from: tokyopua on October 10, 2006, 11:00:32 AM
I think the purchase of YouTube.com by Google for 1.6 Billion dollars is helping DIVX today, up over 8% currently 

Yes, I guess that if Google buys Youtube for $1.65B, that means that DIVX current market cap of $740M is cheap ... not that we can compare DivX and YouTube profiles, since DivX has real revenues and a solid bussiness model, but it is boosting up the online video / related sector.

regards,

Ive been downloading a hefty load of divx movies latley,  watched "inside  man" last night. Thats a good one

i need to get me one of those kiss players 

I have not seen a KISS PLAYERS here in U.S

Quote from: fous on October 10, 2006, 03:56:52 PM
Ive been downloading a hefty load of divx movies latley,  watched "inside  man" last night. Thats a good one

i need to get me one of those kiss players 

Quote from: Terliso on October 10, 2006, 10:29:35 PM
I have not seen a KISS PLAYERS here in U.S

I didn't knew KISS wasn't available on the US

They are unavailable on Amazon:
http://amazon.com/s/ref=sr_nr_p_4_3/102-2211940-1376143?ie=UTF8&keywords=divx&rh=n%3A172282%2Ck%3Adivx%2Cp%5F4%3AKiSS%20Technology&page=1

I found it on ebay, but shipping from Europe:
http://cgi.ebay.com/KISS-DP-600-High-Definition-Media-Player_W0QQitemZ140040149605QQihZ004QQcategoryZ29785QQssPageNameZWDVWQQrdZ1QQcmdZViewItem

But remember, KISS is like the «Ferrari» of DivX players You don't need a KISS to have DivX compatibility.

You can easily buy a cheap Philips like this one with DivX certificate:
http://www.amazon.com/Philips-DVP5140-Multiformat-Windows-Support/dp/B000F2KUK8/sr=1-1/qid=1160552000/ref=pd_bbs_1/102-2211940-1376143?ie=UTF8&s=electronics

And there are lots of other cheap DIVX players out there, a friend of mine bought a strange brand Yamada, for $35 few time ago

Update:
Great session for DIVX , The news from Google buying Youtube had a good effect on this sector, in my opinion making DIVX look cheap after this $1.65B deal.
But this news is not much relevant for DIVX, it just shows that the Online Video sector is very hot right now, and shows the willing of big companies to make acquisitions on the sector

We are not planning to sell DIVX for the short term, despite any stock volatility right now.

Trading Plan:
Hold DIVX

Best regards,

Buffalo tech makes this HD media player very similar to the kiss tech one

runs for around$250

http://www.buffalotech.com/products/product-detail.php?productid=96

Visteon Brings Popular Digital Media Format to the Streets

October 12, 2006 13:20:00 (ET)


VAN BUREN TOWNSHIP, Mich., Oct 12, 2006 /PRNewswire via COMTEX/ -- Visteon Corporation (VC, Trade) and DivX, Inc. (DIVX, Trade) today announced that the Rear Seat Entertainment System (RSE), which will be available as an option on the 2007 Volvo XC90 sport utility vehicle, is DivX Certified. The Visteon product is the first DVD player factory-installed by an automaker to carry DivX certification, which assures consumers it will play all DivX videos correctly.

"Visteon continues to bring the latest innovations in mobile electronics to the automotive market," said Steve Meszaros, vice president of Visteon's electronics product group. "DivX is an increasingly popular technology for the on-the-go digital media lifestyle, and we're excited to be the first to bring DivX video playback capability to the original-equipment automotive environment."

As a DivX Certified device, Visteon's DVD player supports high quality playback of all versions of DivX video, purchased or rented DivX movies, and all the content available from the DivX Stage6 video community site. Visteon's system features two seven-inch headrest-mounted color monitors, a DVD player and two infrared wireless headsets for a complete in-vehicle rear-seat entertainment experience.

"The Visteon player is a powerful and elegant device that will let Volvo passengers enjoy their entire library of video content wherever they are," said Jim Geison, senior vice president of worldwide sales at DivX, Inc. "By achieving DivX Certification for its player, Visteon is providing real value for the user by ensuring compatibility with one of the most popular and widely used digital media formats on the market."

DivX Certified products enable consumers to create, play, and share high- quality video content across a range of devices and platforms. Products that bear the DivX Certified logo have undergone rigorous testing to ensure interoperability and visual quality. More than 46 million DivX Certified devices have been shipped worldwide. To learn more about the DivX Certification program for consumer electronics devices, visit http://www.divx.com/certification .

Visteon provides advanced in-vehicle entertainment, driver information and wireless connectivity products globally. Its electronic product lines include audio systems, driver information systems and infotainment -- information, entertainment and multimedia.

Visteon Corporation is a leading global automotive supplier that designs, engineers and manufactures innovative climate, interior, electronic and lighting products for vehicle manufacturers, and also provides a range of products and services to aftermarket customers. With corporate offices in Van Buren Township, Mich. (U.S.); Shanghai, China; and Kerpen, Germany; the company has more than 170 facilities in 24 countries and employs approximately 49,000 people.

About DivX

DivX creates products and services designed to improve the experience of media. Our first product offering was a video compression-decompression software library, or codec, which has been actively sought out and downloaded over 180 million times in the last four years, including over 50 million times during the last twelve months. We have since built on the success of our codec with other consumer software, including the DivX Player application. We distribute this software from our website, http://divx.com , which was visited on average by over five million unique visitors per month during the second quarter of 2006. We also license our technologies to consumer hardware device manufacturers and certify their products to ensure the interoperable support of DivX-encoded content. Over 46 million DivX Certified hardware devices have been shipped worldwide, including over 10 million devices reported to us by our customers during the second quarter of 2006. In addition to technology licensing to consumer hardware device manufacturers, we currently generate revenue from software licensing, advertising and content distribution.

Visteon Brings Popular Digital Media Format to the Streets

October 12, 2006 13:20:00 (ET)


VAN BUREN TOWNSHIP, Mich., Oct 12, 2006 /PRNewswire via COMTEX/ -- Visteon Corporation (VC, Trade) and DivX, Inc. (DIVX, Trade) today announced that the Rear Seat Entertainment System (RSE), which will be available as an option on the 2007 Volvo XC90 sport utility vehicle, is DivX Certified. The Visteon product is the first DVD player factory-installed by an automaker to carry DivX certification, which assures consumers it will play all DivX videos correctly.

"Visteon continues to bring the latest innovations in mobile electronics to the automotive market," said Steve Meszaros, vice president of Visteon's electronics product group. "DivX is an increasingly popular technology for the on-the-go digital media lifestyle, and we're excited to be the first to bring DivX video playback capability to the original-equipment automotive environment."

As a DivX Certified device, Visteon's DVD player supports high quality playback of all versions of DivX video, purchased or rented DivX movies, and all the content available from the DivX Stage6 video community site. Visteon's system features two seven-inch headrest-mounted color monitors, a DVD player and two infrared wireless headsets for a complete in-vehicle rear-seat entertainment experience.

"The Visteon player is a powerful and elegant device that will let Volvo passengers enjoy their entire library of video content wherever they are," said Jim Geison, senior vice president of worldwide sales at DivX, Inc. "By achieving DivX Certification for its player, Visteon is providing real value for the user by ensuring compatibility with one of the most popular and widely used digital media formats on the market."

DivX Certified products enable consumers to create, play, and share high- quality video content across a range of devices and platforms. Products that bear the DivX Certified logo have undergone rigorous testing to ensure interoperability and visual quality. More than 46 million DivX Certified devices have been shipped worldwide. To learn more about the DivX Certification program for consumer electronics devices, visit http://www.divx.com/certification .

Visteon provides advanced in-vehicle entertainment, driver information and wireless connectivity products globally. Its electronic product lines include audio systems, driver information systems and infotainment -- information, entertainment and multimedia.

Visteon Corporation is a leading global automotive supplier that designs, engineers and manufactures innovative climate, interior, electronic and lighting products for vehicle manufacturers, and also provides a range of products and services to aftermarket customers. With corporate offices in Van Buren Township, Mich. (U.S.); Shanghai, China; and Kerpen, Germany; the company has more than 170 facilities in 24 countries and employs approximately 49,000 people.

About DivX

DivX creates products and services designed to improve the experience of media. Our first product offering was a video compression-decompression software library, or codec, which has been actively sought out and downloaded over 180 million times in the last four years, including over 50 million times during the last twelve months. We have since built on the success of our codec with other consumer software, including the DivX Player application. We distribute this software from our website, http://divx.com , which was visited on average by over five million unique visitors per month during the second quarter of 2006. We also license our technologies to consumer hardware device manufacturers and certify their products to ensure the interoperable support of DivX-encoded content. Over 46 million DivX Certified hardware devices have been shipped worldwide, including over 10 million devices reported to us by our customers during the second quarter of 2006. In addition to technology licensing to consumer hardware device manufacturers, we currently generate revenue from software licensing, advertising and content distribution.