Hi Sun Tzu; My theory: Rambus will obviously lose their appeal of their fraud conviction, but the stock won't dive until the last nail is pounded flat with the coffin lid. First a review of what happened...
The first hint of this was when Judge Payne ruled that Infineon had presented a case of prima facie fraud, and consequently Infineon would be able to depose Rambus lawyers. In fact, I think I was the first on the thread with the "prima facie fraud" news on March 13th and 26th: #reply-15498262 #reply-15563057.
The only response I got was this one:
The Prophet, March 26, 2001
Five will give you ten that the judge never would have granted IFX' request had he known of the now-released IFX documents from 1992. #reply-15563076
I had read Rambus selection of extracts from the late IFX documents, and knew that they were not legally significant, for instance, companies say things about their competitors like "deadly menace" all the time and it is not an illegal activity. Heck, they say worse stuff than that when talking to the press. I had also read every open docket, some repeatedly, and had noted that Infineon's legal staff seemed to be considerably better than Rambus'. (For instance, see #reply-15378059 from Feb 20th, where Judge Payne threatens Rambus lawyers with attorney's fees and sanctions for refusing to say which claims they were asserting. Funny, that was an early indication that Rambus had no infringement case. Also see "These are just the US cases. God only knows what's happening to Rambus in foreign countries where they don't have the (supposed) home court advantage." #reply-15398287 for links to problems with the Micron and Hyundai trials.) So my reply to The Prophet was to offer to make a bet that Infineon will depose Rambus' lawyers:
Bilow, March 26, 2001
Okay, here's a prediction: Rambus will eventually lose the appeal, and Infineon will depose Rambus' lawyers.
-- Carl
P.S. Do you want to predict the opposite? We should have a conclusion in the next month, and the winner can then call the loser a "legal moron" for failing to correctly interpret the documents so far produced. You're a legal scholar, come on, be a sport, and say that you think that Rambus will win the appeal. #reply-15563083
My win of the bet took two parts, first where Judge Payne didn't change his mind, #reply-15582915 and the second where the appeals court turned down Rambus' appeal: #reply-15629290 on April 6th. I've now got permission to call The Prophet a legal moron, but I've decided to scrub that term from my vocabulary. And anyway, the real issue with The Prophet is that despite being a legal expert, he nevertheless read this obvious case completely wrong from one end to the other. He missed the legal evidence because he truly was unable to distinguish between right and wrong. My conclusion is that he is morally "challenged", and is unable to distinguish between right and wrong. This is not a defect unique to him, nearly every shareholder of this company is suffering from this (possibly greed induced) problem.
For more, see: mentalhealth.com Other common problems for posters on this thread would be: mentalhealth.com (persecutory type), mentalhealth.com
and of course mentalhealth.com but at least we're not on Yahoo where we'd have to deal with the mentalhealth.com types. [Note to self: Don't read Yahoo RMBS thread just after eating.] And I can't let this go by without noting that the following is one great read: hal-pc.org
By the way, one of the more interesting posts on TMF was from an Egyptian who was a bit ashamed that he had to explain to his child, that yes, the company he had invested money into had been convicted of fraud. This is worse than losing SDRAM and DDR royalties to the Markman ruling, the company is tainted now.
Getting back to topic, LOL, the latest news is that a jury decided that Rambus did commit fraud. Rambus says they're going to appeal this, but they've already been turned down by the (same?) court of appeals over the very subject of the fraud they were convicted of. The court of appeals has already ruled that Judge Payne was correct in ruling that Infineon had presented a prima facie case of fraud. Now a jury has turned the prima facie case into a legal finding of fact. And the fraud was not just a "technicality" to the jury. You don't vote an award of $3.5 million based on a technicality.
So you have a four judges rule that Infineon showed a prima facie case of fraud, and now a jury convicts. There is no way that this will be reversed on appeal. No way. Not a chance. This is over. Okay, maybe there's what engineers call a "point-Oh-$h:t" chance.
But that doesn't mean that the stock is going to go down, not until the last news is out. Those who suddenly find that they don't want to own the stock of fraudbus are able to find buyers among the people who still believe. All this time, the short interest is zooming through the roof, and that makes this a dangerous stock to short.
On the other hand, the memory makers who signed stupid royalty agreements are going to abrogate those contracts, but the news of that is very difficult to time. If royalty payments are made once each quarter, presumably a few weeks after the end of the quarter, then the memory makers have until sometime in July to decide whether to pay. Because it is human to not want to admit that you screwed up until the last possible minute, they will very likely not decide whether to pay or not until the last possible minute. So you could have to wait until July to see the SDRAM and DDR royalties halted (and I would expect to see suits for return of already paid royalties as well).
Meanwhile, as you saw in today's conference call, Rambus management will continue to shine the investors. Because of that, this is still a dangerous stock to short, I think.
-- Carl
P.S. Being a legal mom and pop, I truly have no real understanding of what "prima facie" means, so you will have to take the above at face value. |
