“the Cisco Systems of the 21st Century”

By Travis Johnson, Stock Gumshoe, March 26, 2007

A few readers sent this one in, and one of you had even figured out the company — great work.

Here’s what we’ve got:

The tease ad is from Quantum Investor/Quantum Confidential and Brian Hicks, as have been some of the previous ones I’ve looked at. This time, Brian wants to send you a report called Dawn of the Digital Video Revolution — if you’ll just subscribe.

And in that report, he’ll tell you about a company that’s “recommended by YouTube and Google” and has been called “the glue that holds the entire digital media marketplace together.”

Here are a few of the details:

Came public about six months ago, in September.

Located in San Diego, and has a brash CEO who aims to build the biggest company in San Diego (surpassing Qualcomm). (He was quoted to that effect in the San Diego Union-Tribune back in November.)

Market cap of $750 million (a bit less now, the company’s down about 20% on the year).

And he makes a bold prediction about the future of the company’s stock price:

“I’m talking about going from just over $23 to north of $303 per share in no time.” (made only slightly more difficult by the fact that the stock has dipped to about $20)

Put all that into the Stock Gumshoe cognification machine and we find out that this company is …

… drum roll please …

DivX (DIVX)

This is a digital video company, best known for the DivX digital video format that makes internet transmission standardized and easy. I’m no techie so I don’t know why DivX is any better than its competitors, but it is in very wide use and has been around for close to a decade, and they’re aiming to cash in on both the use of their technology and on the “community” of digital video uploaders and downloaders. T

hey just came public back on September 22, and they are profitable, so maybe there’s something there for folks who want to delve into it. There are plenty of competitors and related companies, including On2 Technologies with their Flash codec and the big guys like Microsoft and Apple, and I don’t really know where DivX stands in relation to them … or whether there’s any potential that they could be a buyout target, or a target for squashing, from any of the big guys.

I don’t know if the hyperbole about being the “next Cisco” will hold water, but I do know that you needn’t subscribe to an expensive newsletter, even for a “free” trial, just to find the name of the company they’re dangling in front of your eyes like a burro’s carrot. If you know more about why this company is or isn’t worth the money, feel free to comment here — I’m sure we’d all like to hear it.


Leave a Reply

8 Comments on "“the Cisco Systems of the 21st Century”"

avatar

Anonymous
Guest
0
Anonymous
March 26, 2007 7:04 pm

I figured out it was DIvx too. Can’t figure out how they will make money if you can download Divx for free….?

coldfusioneer
Guest
0
coldfusioneer
April 3, 2007 8:53 pm

No way it’s Divx. The correct answer is Raptor Networks [RPTN]. CISCO builds switches. So does Raptor Networks, but much better and cheaper. It’s moving now, so hurry. US Army contract is just around the corner.

Stock
Guest
0
Stock
April 3, 2007 9:05 pm
It may well be that the correct answer to “who’s the next Cisco” is Raptor, I have no idea — but Raptor is definitely not the company being pushed in this email. I have seen them pushed by other newsletter spam, though, on this army stuff — interesting business, thanks for the comments. And as for DivX making money off stuff you download for free … I’m not sure, they may get licensing fees from creators (like Adobe does) or they may be pinning their hopes on their social network plans. I’m not interested, but I could be wrong.
tiramisu
Guest
0
tiramisu
April 5, 2007 9:01 am

Of course, it is Raptor Networks as pointed out by coldfusioneer. And Tobin Smith of ChangeWave owns shares of it.

Anonymous
Guest
0
Anonymous
April 12, 2007 11:34 pm

Sorry but your all wrong!
It’s (ONT) remember the tease starts with a company at 50 cents and by the 2nd e-mail clamied has doubled and by the 3rd e-mail has tripled. look at ONT at $1.97 today 4-12-07 and still has more up side to come. also (KEY)it is a software company, not a switch builder.

One Guy
Guest
0
One Guy
April 13, 2007 12:06 am
I think you’re all reading a few different emails or thinking about different ads — for this one from Quantum it’s definitely DIVX, but there are other “next Cisco” teaser ads out there. Neither RPTN nor ONT is anywhere near the market cap teased in this email (over 700 Million), and neither one is headquartered in San Diego. To say nothing about the specific quotes about the share price (at one point $23, Raptor and On2 aren’t close) and the quote from the CEO (which I’ve checked on the San Diego Union-Tribune, and it’s absolutely DivX). On2 and Raptor may… Read more »
tiramisu
Guest
0
tiramisu
April 24, 2007 5:50 pm
This the teaser I’m referring to when I’m saying the company is Raptor Networks.Best regards and keep up the excellent work !! ======= Teaser ON =========== The “next Cisco” I love rooting for the underdog. Be it football, basketball or a game of tiddlywinks, I love to see the up-and-comer take it to the champ. When it comes to investing, I love an underdog, too – but for a very different reason. When you invest in an underdog – after you’ve done all your homework, of course – you get the opportunity to reap some truly mammoth profits. The company… Read more »
One Guy
Guest
0
One Guy
April 25, 2007 2:57 pm

Thanks — Yep, this is the Tobin Smith one I haven’t gotten around to reviewing in detail yet, but my sense is that you’re right about it being Raptor Networks. Thanks for saving me the effort on this one … maybe I should open up a forum or something on this site so it’s easier to share.

wpDiscuz