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Technology Stocks : Nimbus CD International
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To: SIer formerly known as Joe B. who wrote (1552)5/21/1998 1:29:00 PM
From: William T. Katz  Read Replies (1) of 1673
 
No mention really if DIVX fails. NMBS has allocated a portion of their DVD capacity for DIVX. Four scenarios:

DIVX does well, Open DVD does well:
NMBS rockets and has to increase DVD capacity quickly. DIVX contract for 150 million discs in 5 years is a substantial contract if the demand is really there.

DIVX does well, Open DVD fails:
NMBS still does great. They are only manufacturer (?) according to conf call for DIVX.

DIVX fails, Open DVD does well:
NMBS does well after reallocating DVD capacity for OpenDVD and not DIVX, but probably not as well as in either scenario above. DIVX margins are probably a little less than for OpenDVD because they probably had to give discount to get such a huge volume.

DIVX and Open DVD fails:
I think this is nearly impossible. There may be a slowness in ramp-up, but one or both of these will succeed. If both fail, NMBS growth rate defaults to long-term CD growth rate after taking some charges against unused DVD line capacity.
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