The Linius share price closed at 5.7 cents yesterday and opened at 5.8 cents this morning, before shooting past the 7.5 cent market shortly after lunchtime for a brief period. At the current share price, this company has a market capitalisation of ~$110 million.

So what is Linius Technologies? And why is this company's share price going bananas today?

What is Linius Tech?

Linius Technologies is in the business of writing video editing software. The company tells us that it has "cracked the code that makes hyper-personalised video possible". It was founded back in 2011, and (unfortunately for shareholders), has never quite reached its initial public offering (IPO) price of 20 cents since.

The company's stated purpose is "transforming cumbersome, static video files into dynamic virtual files that can be easily manipulated on-the-fly, delivering an enhanced, custom experience for content creators, distributors and consumers".

Linius sees itself as a disrupter of "multi-billion-dollar markets" with its video technology. It is seeking to commercialise this technology across 6 "core markets", which are:

• News & Media,
• Sports Broadcasters & Rights Holders
• Education
• Corporate Communications
• Security & Defense
• Sports Betting

The company aims to do this through 2 primary product offerings: a Video Search Solution powered by the patented Video Virtualisation Engine; and a software-as-a-service (SaaS) platform, Linius Video Services.

The Video Search Solution reportedly helps users instantly search for any object, across any number of video sources, and instantly play back the content that matches the search results. It also can "automatically push search results into existing workflows", as well as deliver "an infinite number of streams" to individuals in a tailored manner based on "existing consumption preferences or behaviour".

Linius sees these products as having specific use in the news media landscape, enabling "hyper-personalised news-as-a-service". With sports, it wants to "provide every viewer with a hyper-personalised video feed of the sporting moments that matter to them". It sees security and defense applications for the service as being able to "detect suspicious activities and intervene before an incident occurs".

Why is the Linius share price rocketing today?

The stellar performance of the Linius share price today appears to be heavily connected to an ASX announcement the company released to the markets this morning before open.

This announcement concerned the Whizzard product that Linius first announced on 25 November. Back then, the company revealed that Whizzard would be a "unique product". It promises to allow users to "immediately search, assemble and share video content from within recorded meetings".

It was announced that Whizzard would be immediately available to users of Zoom Video Comminications Inc's (NASDAQ: ZM) Zoom, Microsoft Corporation's (NASDAQ: MSFT) Teams and Cisco Systems Inc's (NASDAQ: CSCO) Webex products. This combination represents 55% of the world's video conferencing market, according to Linius.

Amazon's magic touch

Importantly, Linius noted then that, "[Amazon.com Inc's (NASDAQ: AMZN)] Amazon Web Services (AWS) hosts the WHIZZARD platform, underpins its AI services and is providing funding support for the product's marketing efforts".

This is important because the only update Linius gave to that announcement today was the following:

Linius is an AWS Partner Network (APN) Technology Partner, and like other businesses within the APN, can unlock funding support for training, new product and solution development, and go-to-market activities.

Linius has been approved by AWS for funding support for the WHIZZARD go-to-market activities. Whilst Linius does not consider the level of funding itself as material, the collaboration and hosting of WHIZZARD on AWS is material as it demonstrates a deepening of Linius' relationship with AWS and opportunities for co-marketing of the WHIZZARD product suite.

So it appears that the market today is reacting to this "deepening" relationship that Linius has with Amazon. Amazon is a highly popular company for investors around the world due to its breathtaking growth over the past 2 decades, which has seen it grow into a US$1.58 trillion company today. 

The post ASX stock of the day: Linius (ASX:LNU) share price blasts up 30% on product debut appeared first on The Motley Fool Australia.

While this is positive, it pales in comparison to some of the gains being made at the small end of the market.

Three small caps that have caught the eye with strong gains today are listed below:

The Biotron Limited (ASX: BIT) share price has continued its incredible run and is up a further 35% to 13.5 cents. Investors have been fighting to get hold of Biotron's shares since the drug developer announced positive results from the BIT225- 009 Phase 2 trial of its lead drug BIT225 in HIV-infected patients in combination with current antiretroviral drugs. According to the release, the data demonstrated that there are significant immunological benefits in patients receiving antiretroviral drugs with 200 mg BIT225 compared to antiretroviral drugs plus placebo. I think Biotron is well worth keeping a close eye on.

The Linius Technologies Ltd (ASX: LNU) share price has stormed 11% higher to 7.2 cents. Investors have responded positively to news that the video virtualisation engine provider has launched a software-as-a-service (SaaS) platform that makes its patented technology commercially available to the world. The company's CEO, Chris Richardson, believes that the Linius Video Services platform "is a critical step towards achieving our goal of scaling rapidly and making the world's video accessible as data." He added that: "Organizations and individuals across all video-rich market sectors can now instantly access our video virtualization technology and unleash the value of their video assets."

The Yowie Group Ltd (ASX: YOW) share price has surged 11.5% to 14.5 cents following the release of the confectionery company's first quarter update. According to the release, Yowie achieved cash receipts of $5 million during the quarter. Although this was a decline of over 12% on the prior corresponding period, investors appear to be pleased with the way the company has slashed its staff, administration, and corporate costs. This allowed Yowie to post positive operating cash flow of $581,000. While this is certainly a step in the right direction, I think it is a little too soon to get excited.

The post These 3 small cap ASX shares are posting strong gains on Wednesday appeared first on The Motley Fool Australia.

Here are the eight companies he mentioned:

Updater Inc (ASX: UPD) develops and markets tools for consumers in the United States to complete move-related tasks. The company's share price rose 203% in 2017 and has a market capitalisation of $710 million. For the six months ending 30 June 2017, Updater made an after-tax loss of US$5.73 million on revenues of US$505,017.

GetSwift Ltd (ASX: GSW) provides cloud-based logistics management software. GetSwift shares increased 1,120% in 2017 and the company has a current market cap of $590 million. For FY2017, GetSwift recorded revenue of $336,356 and a loss of $1.92 million.

LiveHire Ltd (ASX: LVH) is a developer of human resources technology products and has a market cap of $318 million. LiveHire shares rose 278% in 2017, with revenues of $775,845 and a loss of $4.65 million for FY2017.

Buddy Platform Ltd (ASX: BUD) provides data aggregation and management platforms for Internet-connected devices. For FY2017, Buddy had revenues of $1.05 million and a loss of $16.95 million. The company has a market cap of $257 million and enjoyed share price growth of 350% in 2017.

Yojee Ltd (ASX: YOJ) is a developer of logistics software which aims to optimise and manage fleets. The company's shares went 750% higher in 2017 and now has a market cap of $213 million. Yojee had revenues of $132,901 and recorded a $1.86 million loss for FY2017.

Livetiles Ltd (ASX: LVT) has created a suite of web-based software products for the digital workplace and has a market cap of $196 million. The company made a $7.10 million loss on revenues of $1.77 million in FY2017. Livetiles shares rose 250% in 2017.

Digitalx Ltd (ASX: DCC) states it provides initial coin offering services, blockchain consulting services and blockchain-related software development. For the year ending 30 June 2017, Digitalx reported revenues of US$47,133 and a loss of $3.97 million. Digitalx has a market cap of $180 million and the firm's share price has risen close to 800% in the past twelve months.

Linius Technologies Ltd (ASX: LNU) has developed technology to value-add to standard video content, and the company's share price is up more than 300% in the last year. In its 2017 Annual Report, Linius had revenues of $41,492 and recorded a loss of $4.23 million. Linius has a market cap of $160 million.

Foolish takeaway

When investing in shares for the long-term, it's important to focus on a company's fundamentals; its ability to generate earnings and cash flow, and its financial health. While stocks in hot industries may rise quickly in the short-term, it is a firm's earnings power that will ultimately determine long-term investment returns.

That's not to say that these eight companies won't be successful, just that investors should ignore the noise and instead carefully consider what price they are paying for a stock that doesn't have any earnings.

The post This fund manager believes a bubble is brewing among small-cap tech stocks appeared first on The Motley Fool Australia.