September 15, 2006 11:19 AM PDT

DivX set to go public next week

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DivX, the video compression company that went from public enemy No. 1 in Hollywood to a trusted partner, will hold a public offering next week.

The San Diego-based company plans to sell 9.1 million shares for $12 to $14 a share.

Revenue for the first six months of 2006 came to $27.2 million, while net income was $5.9 million. In 2005, annual revenue was $29.3 million and net income was $2.3 million.

The DivX video compression technology offers DVD quality at 10 times the compression of traditional MPEG-2 files, enabling a full-length film to fit on one CD or eight films to fit on one DVD. More than 50 million DivX-certified devices have been released.

DivX does for video what the popular MP3 audio standard does for music, allowing people to create and play copy-protected video that's small enough to be easily distributed over the Internet and played on a variety of devices.

Initially, studios complained that consumers used the company's software to trade copyrighted video. The company subsequently added copyright protection technology. That led to deals with consumer electronics companies--which bundle the software so consumers can play DivX-compressed video--and film studios. The company's dream is to get studios to distribute their films over the Web with its software.

DivX is big in Europe, in part because the technology originated in France, executives at the company have said.

The company was founded in 2000 and has more than 200 employees.

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DivXNetworks, net income, video compression, San Diego, film

2 comments

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"10 times the compression"
DVD quality at 10 times the compression of traditional MPEG-2 files.

This implies, that the compression offers equal quality at 10 times the compression. What bull roar. At *best*, it yields equal quality (i.e "I cant tell the difference") at 1/3 or 1/4 the bitrate of MPEG 2 -- on par with about 4 other codecs out there.
Posted by kensystem (8 comments )
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Does anyone know the actual Public offering date?
Does anyone know the actual Public offering date? $12-$14 dollars per share sounds great, but my hunch is right, this one needs to be bought at IPO opening or the price will be to high to buy for weeks
Posted by DMasut (2 comments )
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