Just a reminder:
e.digital -- Investing in Digital Music Companies Part II
4/30/99 - In part one, digital music downloads was introduced as a possible threat to the music industry. The arrival of Diamond Multimedia's Rio MP3 player and Creative's Nomad have alarmed the music industry even more. Many other companies have begun to explore making new players, including Samsung which is making one called "Yepp".
note: the following article below is to show the power of being associated with the internet--e.g. announcing plans to develop a new handheld device for listening to downloaded music from the Internet. However, I feel that this stock has already had it's move up...and should be approached with caution. Enjoy reading!
In an annoucement made on April 21, 1999, Lucent Technologies, Texas Instrument and e.digital agreed to develop a new handheld device for listening to downloaded music from the internet...much like that which already exists from Diamond and Creative. The only difference: the use of Lucent's EPAC format instead of the popular MP3 format.
Now you've probably heard of Lucent and Texas Instrument...but who is e.digital? Well it turns out that many people have never heard of the company, but it does have stock that is traded on the Nasdaq bulletin board (EDIG). Prior to the announcement, the stock traded around 50 cents. It wasn't until 6 days after the announcement, that the stock began taking off, ultimately hitting 3 11/16 on Wednesday (4/28). And before April 12 this stock was floating around 20 cents (a press release detailing a partnership between e.digital and IBM to establish voice technology standards pushed the stock up). The stock traded 35 million shares on Wednesday, and is still trading above 10 million shares daily. At a current price of $2, it has a market cap of $168 million. Right now, it seems that this stock will just be another stock in the ongoing internet bubble.
But, back to the focus of digital music downloads. Lucent is one of the founding members of SDMI (secure digital music initiative) whose main mission is to come up with a secure form of downloading music. The EPAC technology is a newer version of the Perceptual Audio Coder developed by Bell Labs (the research arm of Lucent). It is said to be better sounding than even AAC (an improved format over the popular mp3 format). So why the need for Texas Instrument? This new device will be running of DSP processors produced by TI. And e.digital? It is the corporation which will be responsible for manufacturing these devices.
So what else does e.digital do? This is what the company states, "e.Digital Corporation offers an engineering partnership for th world's leading electronics companies to link portable digital devices to PCs and the Internet. Engineering services range from the licensing of e.Digital's patented MicroOS file management system to custom product development and manufacturing services." |
