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Technology Stocks : RAMBUS (Nasdaq: RMBS) - THE EAGLE
RMBS 116.00-7.0%12:07 PM EST
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To: Alan Hume who wrote (568)1/10/2000 11:59:00 AM
From: Alan Hume  Read Replies (3) of 2039
 
"Does Rambus always get whacked after earnings?
Not always, but more often than not"

Since posting ON Saturday, I have given the matter a little more thought, and conclude that RMBS could this time trash the expected 10 cents.

Reason behind my thinking is that SONY will commence shipments of PS II in March to the Japanese market. We have all read that SONY has ooh for 20kk boxes, a lot for channel filling, and certainly not all for the Japanese market, but nevertheless....

Now RMBS gets revenues on shipped DRDRAM`s right?

Let`s look at the manufacturing chain:

1) Toshiba manufacturers the DRDRAM`s and invoices them to the RIMM manufacturer.**
2) The RIMM manufactures the RIMM`s and invoices them to SONY`s subcontractor.
3) The subcontractor assembles and tests the PS II box and ships it to SONY.
4) SONY ships the box to the distribution channel.
5) The distributor (or wholesaler) ships to the retailer.

** I am not certain that PS II uses the DRDRAM`S in RIMM form. Anyone?
Either way, its a long chain

The way I see it, RMBS are invoicing Toshiba for their royalty 30 days after Toshiba invoiced the RIMM manufacturer. regarding the length of the chain, and the necessity to initially fill the channels, I think it more than likely that revenues could have started in Q4/99. If so, the 10 cents earnings will be blown away

Comments anyone?

Alan
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