Rambus (RMBS) - Eagle or Penguin Message Board

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Technology Stocks : Rambus (RMBS) - Eagle or Penguin

RMBS 94.82

+2.7%

Nov 26 3:59 PM EST

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To: Bilow who wrote (44418)	6/15/2000 7:56:00 AM
From: GVTucker	Read Replies (1) of 93625

Bilow, RE: Since late last year, the chance RDRAM taking over has been zero. But assuming it did, RMBS would be a decent buy at its current price. The memory industry makes $30 billion of memory per year. 1% of that would be $300 million, and double that to include memory controllers, say $0.6 billion per year. RMBS would be quite a bargain at the current price if that were to occur. RMBS market cap as of the close yesterday was $22,001mm. Making the extreme assumption that RMBS has no expenses and needs to make zero investment in R&D so that the $600mm in revenues flow straight to the bottom line give RMBS after tax revenues of $420mm if you assume a generous 30% tax rate. That gives you a PE in excess of 50. And that is using every single assumption in RMBS' favor. Hardly 'quite a bargain'.

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