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August 31, 2006
DivX Sets Price Range for IPO
Just when you thought an alien had abducted the tech IPO market, along comes DivX. The six-year-old, San Diego (Calif.) company develops software that lets people create and play highly compressed video files that can easily be distributed over the Internet and wireless networks. DivX on Aug. 29 set the price range for its proposed IPO at $12 to $14 per share, signalling it could raise as much as $127.4 million. The company would receive $104.5 million of that sum since the rest would go to current stockholders who are unloading their shares in the offering. Among the sellers: VC firm Draper Richards; SVB Financial Group, parent company of Silicon Valley Bank; and Samsung Venture Investment Corp., the VC arm of Samsung. Another Vonage this ain't. Last year, DivX turned in EPS of $0.09 on sales of $33 million, up 102% from the previous year. Gross margins have been expanding steadily for three years and are now at 92%. The company turned cash-flow positive last year and in the 12 months ended June 30 generated $9.9 million in free cash flow, which was 21% of revenues. Read DivX's latest red herring here, and let us know what you think in comments.
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? DivX IPO: Is it a Good Deal? from Mr Wave Theory
Divx (DIVX) , the producer of the DivX Player, is going public during the week of September 18th. JP Morgan is underwriting the deal. I studied the DivX S-1 to answer that question.
Market Opportunity... [Read More]
Tracked on September 3, 2006 01:18 AM
I think there are major risks in this deal. Primarily because of the dependence on Google. Roughly 20% of revenues come from Google. Without Google, the company would not have been profitable.
Posted by: Mr Wave theory at September 3, 2006 01:19 AM