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Jack McKay
1 Comment
Is the Breakdown of Stage6 the Beginning of DivX's End?
As an investor, I think this is the most relevant part about what you wrote:
"If you strip out DivX’s cash, they are currently trading at an enterprise value of less than $200 million, their trailing 12 month P/E is at 18.50 and they are now trading at slightly more than 2 times book. For a company bringing in $80 million a year at 90%+ gross margins, this seem ridiculously undervalued in my opinion.
Whether DivX wasted money on Stage6 or not, their current valuation completely ignores the impact that the Stage6 savings will have on their earnings and certainly doesn’t reflect the potential that DivX’s board may be open to selling to the highest bidder."
The current price of the DivX shares, in my mind, is unjustifiable. I look forward to the Q4 earnings release and conference call.