Grammy Winners Hogwarts Legacy Review 'The Last of Us' Episode 4 Recap Galaxy S23 Ultra: Hands-On Netflix Password-Sharing Crackdown Super Bowl Ads 'Knock at the Cabin' Review Chinese Balloon Shot Down
Want CNET to notify you of price drops and the latest stories?
No, thank you

DivX pops in IPO

Digital compression company sees 17 percent increase in share price on opening day.

Is the IPO dead? No, says digital compression company DivX.

The San Diego-based company saw its stock close at $18.70 on the first day of trading after its initial public offering. It briefly hit $19.50.

The company sold 9.1 million shares for $16 a share, so the closing price represents a 16.9 percent increase. Until recently, DivX said it would offer its shares for between $12 and $14 a share. From $12 a share, the closing price on Friday represents an increase of over 50 percent.

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.

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.

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 copyright 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 goal is to get studios to distribute their films over the Web with its software. The field, though, is relatively crowded, and the company faces many competitors.

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.