3D glasses maker going public

 

The maker of the currently most used 3D glasses, RealD Inc., is about to issue an IPO and raise over $150 million dollars, according to an LA Times report (click here to read it). Although it is not completely certain that this will be the company that will win the race to be the dominant 3D glasses maker, its chances of achieving that grew very significantly after it was the company chosen to run Avatar and Alice in Wonderland in 3D. Since Avatar changed the world in terms of 3D movie technology, it holds a lot of water for RealD to be the winner in the race when it’s all said and done.

Still, this technology that RealD currently uses seems to be more transitional rather than a corner stone. I cannot see people wearing 3D glasses of any kind in about 10 years or so. They or some other company will need to figure out how to make 3D technology work without the need for glasses. This applies to both the movie theatre and for the home. It is easier to justify wearing them in the theatre because it is already somewhat of an event going to the movies, but while sitting at home watching your own TV screen, it looks ridiculous to wear these funky glasses in the living room.

Another potential red flag with this company is that they have not earned a profit yet. Even with Avatar being the biggest movie of all time, RealD still lost money. They hope that this is only because their technology and emergence was costly but with time they will make it back since operating costs are lower now. This may very well be true. For anyone considering investing in this company, serious research needs to be done to find out if this is the case.

They say that part of the money raised will go to investing in new technology. Although this is very important, especially since I just called their current technology transitional and not something to stay with for the long term, it raises the question that perhaps they will invest all this money in something new and also not earn a profit on it. It would then be a pattern of investing in things that lose money which is needless to say, a bad strategy. One thing that can develop their business is by diversifying out of just movies and going in to sports. Watching sports in 3D can be a very interesting prospect that can be very lucrative and allow their technology to be used all the time because the winter will be basketball and football and then the summer will be baseball. Perhaps this is their real future.

Either way, 3D viewing is very intriguing and in the future it will need to lose the glasses. It could be RealD that will be the dominant company in this race and if you believe that this is the case then, investing in their IPO may be something you want to look at.