A Pre-Mortem Post-Mortem

Over at Hacker News, there's a fascinating article discussing the prospects of Raystream, a company that claims to have a new video compression technology. As their 'about' page describes their claims:

Using Raystream, the same one hour 720p video can be compressed up to 90% of its original file size, which makes it easily streamable over connection speeds ranging from 0.4 to 1.0 Mbs per second.

No playback modifications required (codec, browser player, set top box, smart phones, etc.)

Interesting, no?

Enter the description at 'Ihatelawyers3':

OK, at this point, if you know anything about video compression, you start to see a red flag waving in your face. The only way one can encode videos so that they (a) play on mobile phones, and (b) need no playback modifications (codecs, etc) is... if you use an existing codec.
But how can an existing codec compress to 10% of what it... already can do?

So he decided to take their test video and compress it using off the shelf technology. And the results, as described in the hacker news thread:

If you encode their test-video with an off-the-shelf open source H264 codec on normal settings, you end up with a video that is smaller than their sample video. Their "amazing new technology" is just vanilla h264 compression.

 Or put another way:

It means the _normal.mp4 file was encoded in an absurdly high bitrate for no reason except to make their claim of 90% compression.

 Hmmm.

I don't know video compression. The hacker news discussion and the github site seem pretty compelling.

But I do know finance.

Here's Raystream's stock price over the last month:

Yeeeaaaaah. It sure looks like something fishy is going on.

It's an over-the-counter stock, so you can't short it. But let's put it this way - Shylock Money Management is not investing any of its proprietary trading money in RayStream, and would be interested in possible short exposure to the stock.