Digital video compression company’s shares jump 12.5 percent in market open.

September 22, 2006

Wall Street gave DivX a nod of approval in its Nasdaq debut, sending shares up 10 percent from their offering price Friday.

Divx shares gained $2.00 to reach $18.00 in morning trading.

The developer of digital video compression software raised $145.6 million in an initial public offering Thursday, after its shares priced above the high end of the proposed range.

DivX initially offered 9.1 million shares, about 26 percent of the company, which had preliminarily proposed to price its stock as high as $14, according to documents filed with U.S. Securities and Exchange Commission.

DivX shares priced above the proposed range, at $16 per share, according to an SEC filing, a reflection of high interest in the offering. Expectations for the market for DivX technology and strong performance in the aftermarket likely stoked demand for the shares.

Based on the offering price, the company has a market capitalization of $568 million.

San Diego-based DivX has 216 employees and was formed in 2000. In its first full year of operation in 2001, the company reported a $6-million net loss on revenue of $139,000.

In the six months ended June 30, DivX reported $5.9 million in net income on net revenue of $27.3 million. That compares with a reported $675,000 net loss on revenue of $14.1 million a year ago.

The company’s first product was a video compression-decompression software library, or codec, which has been downloaded over 180 million times in the past four years.

DivX plans to use the net proceeds for general corporate purposes as well as to acquire or license products, technologies, or businesses.

The stock trades under the ticker symbol ``DIVX.``

JP Morgan was the lead underwriter of the offering.

CommVault Debuts

Separately, CommVault Systems made its trading debut Friday.

Investors pushed shares up 4.5 percent from CommVault’s offering price in its trading debut. CommVault shares gained $0.66 to $15.16 in morning trading.

CommVault priced its shares at the high end of its expected range of $12.50 to $14.50, the company said Friday in a statement. It offered 11.1 million shares in its IPO, raising $161 million.

Based on the offering price, CommVault has a market capitalization of $668 million.

Oceanport, New Jersey-based CommVault provides data management software applications for storage networks. The company was formed in 1988 and has 575 employees.

The stock trades under the ticker symbol “CVLT.”

Lead managers in the offering were Credit Suisse and Goldman Sachs.