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Davis Freeberg

 
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  • Macrovision Upgraded to Buy, Shares Jump [View article]
    The problem with them buying Gemstar is that the real value is embedded in Gemstar's years of tax losses. Assuming that the merger goes through, it will be very difficult to spin off these assets for at least two years without invalidating the tax benefits from Gemstar's losses. I suppose that there is always the chance that the merger doesn't go through, but to make a bet that they are going to start spinning off businesses seems pretty foolish given the comments that Macrovision has made regarding the Gemstar purchase.
    Jan 10 01:41 PM | Likes Like |Link to Comment
  • Does Market Timing Actually Work? [View article]
    I thought that this was a fantastic article and appreciate your take on the data. I'm not sure that I agree 100% with all of the conclusions, but I think that some of these relationships are certainly worth thinking about. Your article does a great job of taking some of these complex financial ratios and making it easier to understand what those numbers are reflecting. I don't think that there will ever be a magic bullet that can tell you how to beat the market, but I still enjoy sifting through this type of data.
    Jan 9 11:13 AM | Likes Like |Link to Comment
  • Akamai Will Be Essential for Hotspot Prevention [View article]
    With VOD, IPTV and other broadband intensive applications popping up everyday, I don't think that anyone doubts that Akamai is well positioned for growth, but that doesn't answer the question of what should that growth should be worth to investors. In your article, you point out how much Akamai is making, but there isn't any discussion of why these numbers deserve such a high multiple. I'd like to see a discussion of why they are worth a premium, instead of just pointing towards IPTV as a growth driver. With a market cap of $5.5 billion, how much upside is really left in this story? In the past, Akamai has been valued on free cash flow, but as their tax breaks end, what impact will this have on their valuation? While Akamai is clearly a very well run company, at what point do you have to consider the competition, instead of valuing the company as a monopoly? These are all questions that people should be asking. Instead of focusing on the growth of their underlying business, I'd rather see an open discussion of why investors should be paying almost ten times their sales, for a company that is seeing their core business commoditized?
    Dec 17 11:07 AM | Likes Like |Link to Comment
  • Blockbuster's New Paradigm and Its Impact On Competitors [View article]
    I don't doubt that Blockbuster has a tough road ahead, but Keyes' message was right on track. It surprised me to see the market price so much downside, into what I felt were significant improvements. There are no guarantees that Keyes will execute on his vision, but given his track record and a more reasonable business plan, I could see why you would be willing to give it a shot.

    As a Netflix shareholder, I'm happy to see the price wars easing and think that the market has misunderstood Netflix's digital ambitions. Whether Netflix raises prices or sees more growth, I see them also benefiting from Keyes new focus. It will take time before we'll know if Keyes has the right solution, but he seems to be addressing all of the right issues.
    Nov 20 01:16 AM | Likes Like |Link to Comment
  • DivX and Xbox 360: A Potential Win-Win For Everyone [View article]
    I'm not saying that it's impossible for DivX to come to the PS3, but in my mind it's unlikely. It could have been that the DivX logo is the default image for when Sony can't read the file, but can recognize that it is a DivX file. From what I understand, the betatester that leaked the images still couldn't get the file to play. Right now, Sony does sell DivX DVD players in some of the international markets that have a high adoption rate for DivX, but they haven't released DivX DVD players in the US. If Sony was serious about DivX, I would think that they'd end this embargo before taking that kind of a step. Sony will always be a content owner first and that is why their gadgets are so proprietary. When the PSP came out UMD was doomed to failure from the start, but Sony insisted on pumping all kinds of money into it. When it comes to the PS3, they are pushing Blu-Ray. Somehow, it's hard for me to see the content side, opening up their architecture, in a way that they can't control. I'd love to be wrong, but am too jaded to believe that Sony will ever support an open digital platform.
    Nov 9 06:36 PM | Likes Like |Link to Comment
  • DivX and Xbox 360: A Potential Win-Win For Everyone [View article]
    <i>"Nothing invokes more bitter defensive debating prowess than vilifying a ‘fanboys’ console with brash claims of annihilation purely to support you plea for extra functionality. I have a 360 but I am not convinced that DivX support would weigh heavily in a prospective purchasers mind."</i>

    I don't think that DivX support would cause 100% of the customers to buy it, but with an estimated 10% of the global population engaging in some form of p2p (closer to 20% for gamers), it would give them a good reason to choose the Xbox over the PS3. As far as PS3 support for DivX, I'm a skeptic. From what I understand, it looks like the PS3 activated the .AVI wrapper and not actually support for XviD or DivX. There's always a possibility that Sony is also in negotiations, but given their studio exposure, I think that they'd be reluctant to partner with the mp3 of video.
    Nov 9 04:04 PM | Likes Like |Link to Comment
  • DivX and Xbox 360: A Potential Win-Win For Everyone [View article]
    I'd argue that the Xbox 360 is crushing the PS3 right now. Forcing consumers to buy Blu-Ray was a huge mistake and one that is reflected in the weak sales on the console.
    Nov 9 09:38 AM | Likes Like |Link to Comment
  • Seeking Alpha Named Most Informative Investing Web Site by Kiplinger's [View article]
    Congrats on the recognition. I've found some of the best finance related articles on SA. Your writers might not be considered "professional" journalists, but the quality of the reporting has been fantastic from the start.
    Oct 22 03:10 PM | Likes Like |Link to Comment
  • Consistent Seasonality of Smallcaps and Microcaps [View article]
    That's interesting. Do you have any theories on why this might be the case? I could see new 401k contributions possibly having an impact, but would think that this trend would be consistent for the full quarter or first half of the year, if this was the reason behind it.
    Oct 19 12:22 PM | Likes Like |Link to Comment
  • China Natural Gas: Bodisen Biotech's Hidden Gem [View article]
    I wouldn't touch CHNG or BBCZ with a ten foot pole. Both stocks have been under a spam attack on the finance message boards for a while now. The only fertilizer being sold here is the BS that this author is writing about. Be careful with this one.
    Oct 12 11:13 AM | Likes Like |Link to Comment
  • Blogonomics: RSS Feeds [View article]
    These are all good reasons for why you should publish a full RSS feed, but I think that the biggest reason why it ends up generating more page views has to do with people clicking on the links inside the story.

    Most of the links that sites like FT include in their articles ends up going directly back to the FT site. When I read my RSS reader, if something is really long, I'll usually click the headline and read the full story, but more times then not, I'm actually more interested in the links inside the story. If I can see the whole article and the journalist references a past article then, I'm 1,000% more likely to go read that past article, then had that link not shown up in my RSS reader at all.

    Too often sites want to protect their content, but by being smart about where and how they link to their content, they can end up driving traffic to other journalists or back to their own stuff. Engadget is good at doing this, but the MSM seems to prefer no link over linking to anybody (including themselves).
    Oct 2 01:21 PM | Likes Like |Link to Comment
  • Marvell Reveals A Glimpse of the Future: "Quiet Video" Microchip [View article]
    I was curious about the codec support as well Mick and actually asked Balram about what types of signals they can handle and my understanding of the chip is that it has nothing to do with codecs at all. Balram told me that they could really handle any type of signal. I'm not sure the specifics, but I don't think that they are related.
    Sep 7 04:46 PM | Likes Like |Link to Comment
  • Local.com: More Matter, With Less (Prior) Art [View article]
    I don't know, that seems like a weak argument to me. The company said that they were considering their offensive legal options on their last conference call. Clearly, management has signal that they are at least open to engaging in a costly legal battle. If the patent is in fact weak, than I think that this is relevant to consider. Given Mr. Himmelstein's experience in the industry, I think it's worth noting his dissent. If you can find a more qualified opinion, I'd be open to hearing that, but something tells me that there really is a lot of prior art that could wipe this patent out.
    Aug 15 01:22 AM | Likes Like |Link to Comment
  • DivX Considers A Profitable Break-Up, But Are There Any Long Term Benefits? [View article]
    Scott - You're right that Greenhall is still involved, but if you were in his shoes would you give up control of the parent company, just to run the microcap/VC spinoff? I don't think I would, unless I was willing to sell my 8% stake in the company. Greenhall could have been forced out, I'm sure that there are some shareholders who were more than upset about the head fake last quarter, but if he was being forced out, than why would they promote Hell to take over? I would've found a more seasoned CEO who Wall St. would get excited about.

    Maybe the spinoff is really just a cosmetic change and won't impact the long term positioning of the company or it could be an alternative way for DivX to do a secondary offering, but when I see many of the key DivX employees shifting their focus to Stage6, it leaves me wondering what will happen to DivX. It may just be business as usual, but once you separate the companies, then the end game will change for both entities. I don't think that DivX is torpedoing their long term future by doing this, but it does seem like the change is designed more to benefit current shareholders than to improve revenue or net income.

    In the future, the two entities could merge back together, but unringing this bell would be a lot more difficult than splitting up the companies to begin with.
    Aug 2 01:40 PM | Likes Like |Link to Comment
  • DivX Considers A Profitable Break-Up, But Are There Any Long Term Benefits? [View article]
    I think that as an advertiser, you want to put the highest quality ad in front of viewers. I'm not a big fan of the Discovery channel, but check it out in HD and all of a sudden it's some of the best programming out there. The same is true for ads. A low quality video experience, doesn't make me excited, but a high quality ad, makes me take notice. You're right that there would be less acceptance of DivX because they don't have the same player installed base, but this is why DivX would want to push this program. Each user who can't see the video, but wants to will install their product. Flash is on 90% of the computers (probably higher really, but who's counting) because early Macromedia used advertising to deliver the platform into consumers homes. There is no reason why DivX couldn't do the same to acheive greater penetration.

    From the advertisers standpoint, you don't care really care because you wouldn't be paying based on page views, you'd be paying based on the number of ads viewed. If they pay for a million streams, than 1 million people will actually watch the ad.

    The people who would care the most would be the publishers. If you get a 50% response rate with DivX vs. an 80% response rate with Google, than it's up to DivX to pay out enough that they make up the difference. Given how much revenue Google is keeping, I think DivX can do this, if they run at breakeven or a small profit.

    I also think that DivX has a different relationship with independent publishers than some of the bigger companies. Google also understands social networking, but Sony would never be able to convince publishers to distribute a codec that they might make. Stage6 wouldn't have realized the growth that they have seen, if DivX didn't understand community. I may think that there are still plenty of bugs and things DivX could do better, but just like the guys who made Kazaa and Skype, the team behind DivX understands how to reach the larger net community.

    If DivX did try to convince publishers to run third party ads, but couldn't get them to sign on, than what have they really lost? It doesn't cost much to set up an ad platform and even if bloggers/publishers rejected the ads, they'd still have 10 million + hits to sell on their own site.
    Aug 2 01:06 PM | Likes Like |Link to Comment
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