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September 27, 2006

DivX Inc Gets 20% Boost from TV Mention

posted by MR WAVETHEORY at 9/27/2006 04:27:00 PM
Never overlook the power of TV. One mention from Jim Cramer on Mad Money and DivX is up 20% (+3.50) to close at $21.63. I like Jim's success by association thesis on DivX. You have to love the great sound bites.
Cramer said he's caught an "overlooked IPO" in DivX (DIVX - commentary - Cramer's Take). And he believes that the stock, which has increased almost 17% after its IPO, still has a lot of potential to make people money.

DivX is a company that makes software for video compression and decompression and does 18% of its business with Google (GOOG - commentary - Cramer's Take), Cramer said.

"We love Google and anything connected to Google," he said. "Soon there is going to be a bandwidth shortage, and that's why we believe DivX is sexy."
But that's not the only reason Cramer likes the stock. Sure, DivX may have "hotness potential," but the real reason he likes it is because of its fundamentals.
Soon, business schools all around America will be teaching their students how to evaluate companies on the basis of "hotness potential" and and its ability to be "connected to Google." Sure Jim, the real reason you like it "is because of its fundamentals."

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Blogger Davis Freeberg said...

Cramer is a dangerous raving lunatic. I really believe companies are better off outside his radar. I bet by the end of the week, DivX is completely derivitized. It doesn't usually take more then a few days for the piranahs to get the options listed. Once the hedge funds get a taste it will be nothing but volatility city.

9:21 PM  

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