3SOF

What about earnings on Monday?  Do you think Divx will be safe to hold through an earnings announcement?  Just a bit worried about getting burned on a weak first report.  I doubt guidance will be bad though so it will just depend on what people are expecting this quarter.

Quote from: dwest718 on October 26, 2006, 03:19:59 AM
What about earnings on Monday?  Do you think Divx will be safe to hold through an earnings announcement?  Just a bit worried about getting burned on a weak first report.  I doubt guidance will be bad though so it will just depend on what people are expecting this quarter.

Hi Dwest,
Earnings on Monday will give some extra volatility to this already volatile stock... I'm not sure what estimations are on the street, but to be honest, I don't believe current price developments are being drawn for that event... I expect to see DIVX trading near $24 if something goes bad with the earnings or with some more people selling ahead of the earnings, but I'm accepting that volatility risk and holding it.
We already accepted a major fluctuation a few weeks ago, with a correction from $25 to $20, I don't expect anything like that now, but I'm looking to sell DIVX never for less that the $30's++ (maybe more).

Update:
Nothing new to comment about it, earnings will be posted after the close next Monday, we may see some selling or profit taking meanwhile, but I expect $24 to work as a good support area. We are holding DIVX through the earnings announcement.

Trading Plan:
Hold DIVX
Note: Anyone not comfortable with holding this position through earnings should exit this position before Monday's close.

Best regards,

Results released and the stock nose dived after market   
When will I learn not to hold on through earnings..   
DivX, Inc. Reports Third Quarter 2006 Financial Results
Monday October 30, 4:05 pm ET

SAN DIEGO--(BUSINESS WIRE)--DivX, Inc. (NASDAQ:DIVX - News) today announced results for the third quarter ended September 30, 2006.
In the third quarter of 2006, consolidated revenue was $15.4 million, an increase of 83 percent from the third quarter of 2005. Net income in the third quarter of 2006 was $3.1 million, or $0.10 per diluted share, compared to net income of $763,000, or $0.02 per diluted share, in the third quarter of 2005. Stock-based compensation charges for the third quarter totaled $526,000 compared to $58,000 for the same quarter a year ago.

Revenue for the nine-month period ended September 30, 2006 was $42.7 million, or 90 percent more than the comparable 2005 period. Net income for the nine months ended September 30, 2006 was $9.0 million, or $0.28 per diluted share, as compared to net income of $87,000, or $0.00 per diluted share, for the nine months ended September 30, 2005. Stock-based compensation charges for the first nine months of 2006 totaled $1,455,000 compared to $286,000 for the same period a year ago.

"We are very pleased to enter the public markets with a strong third quarter," said Jordan Greenhall, CEO and co-founder of DivX, Inc. "DivX continues to change the way that people experience media. Our success is shown by our expansion into new devices, partnerships and geographies, while our existing partners continue to grow their use of DivX technology. With more than 180 million downloads and over 50 million DivX Certified devices shipped worldwide, we believe that we are at the forefront of an exciting market opportunity."

"We closed the quarter with a strong financial foundation from which to execute our strategy. While our quarterly delivery of revenue and income was solid, we were particularly pleased by the generation of over $3.5 million in cash from operations in the quarter. Including the proceeds from our IPO, we closed the quarter with approximately $147 million in cash and equivalents," said John Tanner, CFO of DivX, Inc. "We intend to use these most recent improvements in our already strong financial position to continue to drive profitable, rapid revenue growth by investing in new technologies and emerging market opportunities, in addition to building out our product distribution capabilities."

On September 21, 2006, the registration statement relating to the initial public offering of DivX common stock was declared effective. The registration statement covered 9,100,000 shares of common stock at $16.00 per share, raising proceeds to the Company, before expenses, of approximately $111 million. As part of the offering, 7,461,538 shares were offered by DivX and 1,638,462 shares were offered by certain stockholders. In addition, concurrent with the DivX initial public offering, the underwriters exercised their over-allotment option in full, purchasing an additional 1,365,000 shares of common stock from certain selling stockholders at $16 per share

Update:
- Earnings: DivX, Inc. Reports Third Quarter 2006 Financial Results
- - [audio] DivX, Inc. Announces Third Quarter 2006 Results

DIVX Earnings were good...  Although the expectations might have been too high and therefore the after hours was so bad... DIVX was down to $21 in the AH, closing at $22.55 (-11% below the close of $25.40).

The stock will open with a gap down; I believe this is just a temporary set back, caused by short term speculators on a «sell the news» typical move. So I'm expecting DIVX to quickly jump back up in the next days.

Trading Plan:
Hold DIVX

Best regards,

Ramsburg, for those of us new to the portfolio; would'nt this be a good entry point for a position? At or near the open?

                       TIA, mitch

Sold my NTRZ     Nice pick Ramsburg!   .............picked up some more DIVX at 22.4  Hopefully I made the right move.  I like this company.  Good luck all!!

Thai

Quote from: anvilring on October 31, 2006, 09:21:35 AM
Ramsburg, for those of us new to the portfolio; would'nt this be a good entry point for a position? At or near the open?

                       TIA, mitch

Hi Mitch,

Yes, I think buying at these levels is a good entry.

Remembering Leaira saying that on principle she never holds through earnings I was wondering if I should have sold DIVX at the open yesterday, and perhaps bought again at the open today. Then I looked at the first five stocks in a list of stocks for which the earnings report was scheduled after market close on October 30. This is the result:



On average, it does not seem to make any difference whether one holds through earnings or not. There goes my dream of making easy money by selling at the open before the earnings report, then buying to cover the following day!

Hi Maestro...

About the earnings, I guess «In doubt stay out» would be a good rule...
The thing about this case, is that DIVX upside potential (in my opinion) is huge, so «in doubt stay in»... But of course, this decision was not the best as we can see now... 

regards,

A print below 22.05 will be a DOUBLE stop buster, and also will be a break of a H&S Top if DIVX goes up and fills this morning's gap, putting in a Right Shoulder, then breaks below the 22.05 neckline.

Pattern Review:

Pattern #1:  In early October, DIVX put in a "W" Bottom.   When the middle of the "W" was taken out to the upsdie, that was Bullish.

Stop: Below 20.18, below the low of the "W"

Pattern #2:  DIVX  rallied to 24.75, then went into a Symmetrical Triangle, which was a Bullish Continuation Pattern when it broke out to the upside.

Notice that Data Point #5 was the third hit to the top of the pattern, validating it as resistance.  It's usually significant when a validated trendline gets taken out.  It was.  DIVX rallied very quickly to the 26.74 high.

Stop: Raise the trading stop to below  22.05, the low of the Symmetrical Triangle

Pattern #3.  After the 26.74, DiVX went into a Bull Flag/Bull Channel, characterized by "lower highs, and lower lows."  It's a Bullish Continuation pattern unless it gets broken to the downside .  

The Bull Flag was violated intraday, but looked fine at yesterday's close.  This morning...

Oops!  "Buy the rumor...sell the news."

Where is the trading stop?

Below 22.05, the low of the Symmetrical Triangle.

What was this morning's low?

22.05.

DIVX has rallied off that key level, which now is a DOUBLE stop:

1. Swing traders using the 22.05 low of the Ascendiing Triangle will stop out 22.04

2. Many of this morning's gap down short-term players will stop out 22.04

Pattern #4:  If this is a gap-filling Right Shoulder rally, a neckline break is 22.04 (the Left Shoulder would be the entire Ascending Triangle...the Head would be the Bull Flag (which we now know wasn't Bullish).

A break of 22.05 would put a target of 17.36 IN PLAY

Math:

26.74 - High

22.05 - Neckline

26.74 - 22.05 = 4.79 Points

22.05 (neckline break) - 4.79 = Target: 17.36

Admittedly, that doesn't seem likely, but there's been a lot of interest in this stock, and players can "turn tail" on a stock if they get into trouble with it, on a technical break.

Good luck to those of you long.  Nice pick, Frederick!

Thanks for your input Melf (applaud)

Update:
As expected from Monday's after hours, DIVX opened with a gap down. The session was kind of volatile, but DIVX didn't re-visit the lows of $21 reached on the previous after hours session, which was a good sign.
I think this move was not based on reason, and I'm expecting DIVX to quickly ajust its price to the upside.

Trading Plan:
Hold DIVX

Best regards,

Up more than 5% Premarket... this is one quick adjustment.  Looking like its falling back a bit but still up over 24 a share.

upgrades coming..   

Upgrades & Downgrades History

DivX, Inc. (DIVX)

UPGRADES & DOWNGRADES HISTORY   
Date Research Firm Action From To
1-Nov-06 JP Morgan Initiated  Overweight
1-Nov-06 Cowen & Co Initiated  Outperform
1-Nov-06 Canaccord Adams Initiated  Buy

DivX Seen Benefiting From Online Video Boom
Wednesday November 1, 12:35 pm ET
DivX Shares Jump As Analysts See Long-Term Growth From Online Video Boom

NEW YORK (AP) -- Shares of digital video compression software maker DivX Inc. jumped in midday trading after two analysts initiated coverage on Wednesday, predicting the company would profit from booming online video consumption.

Canaccord Adams analyst Steven Frankel, who initiated coverage on the stock with a "Buy" rating, suggested investors look at the company's long-term growth potential.

"Clearly since the IPO, the company has generated a large amount of investor interest, leading to a 43 percent rise in the share price since the initial offering on Sept. 21," Frankel wrote in a note to clients. The company went public at $16 a share. "While such a rapid increase could mean that the shares may pause here and digest their gains, we believe the company's future is bright, and we urge investors to look at the company's long-term prospects."

J.P. Morgan analyst Paul Coster, also initiated coverage of the stock with an "Overweight" rating.
"This profitable early-stage company offers very strong growth and profit prospects, in our view, as the leading independent supplier of video compression technology," Coster wrote in a note to investors.
He expects the San Diego company to benefit from increased licensing revenue, and sees the company generating upside from its Web strategy. DivX has a media player available for download on the Web, and it has started a video community site called Stage6.
Canaccord and JP Morgan both underwrote the company's initial public offering.
Shares of DivX, which have traded between $18 and $26.74 in the past two months, added 92 cents, or 4 percent, at $23.76 on the Nasdaq after trading as high as $24.65 in the morning.