Scott Berry

DivX Considers A Profitable Break-Up, But Are There Any Long Term Benefits?

Couple of points:

Greenhall isn't leaving, he's still Chairman of DivX (and owns tons of stock). Plenty of skin left in the game.

DivX is a cash cow, Stage 6 is a venture-stage internet outfit. Completely different cost structures and business models. Aside from the synergy with driving DivX adoption, why *should* they be in the same company? There's no guarantee S6 will succeed, so they owe it to shareholders not to burden them with the dice throw.

Suspect "spinout" means they get VC money, run Stage6 separately, but DivX shareholders still maintain some (though maybe not majority) ownership. This way they avoid the hassle of tryng to fairly value it to existing shareholders for a full spinout.

Nothing to stop DivX from tucking it back in once business model proves itself.