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Technology Stocks : Rambus (RMBS) - Eagle or Penguin
RMBS 107.99+4.8%Jan 16 9:30 AM EST

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To: jim kelley who wrote (39002)3/28/2000 11:02:00 PM
From: Zeev Hed  Read Replies (1) of 93625
 
Jim, take a tax rate of about 40% and assume that sometime between here and the time your "free cash flow" materializes, people may not pay 50 times free cash flow. In the oil industry they are quite happy with 5 to 10 times cash flow even when that cash flow growth at 30% per year.

I think a more rational valuation (at least for investment purposes) should be half that much or 25 times cash flow. That will deflate your own 2100, to $630.

Zeev
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