Rambus (RMBS) - Eagle or Penguin Message Board

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Technology Stocks : Rambus (RMBS) - Eagle or Penguin

RMBS 96.29

+2.2%

3:59 PM EST

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To: Becky who wrote (46033)	6/26/2000 3:13:00 AM
From: cardcounter	Read Replies (2) of 93625

I think this RMBS will settle down below $100 as the future royalties arrangements/upsides are already priced in the high valuation. the lower tier players have settled with little resistance and others will follow.. but it will take some time.. and the top 5 producers will fight it and further delay revenue or worse yet, overturn or limit rmbs's claims... since this thread wants to be optimistic and imagine a perfect world.. lets entertain them... Samsung estimates total annual dram market at $30 bln in 2001. A 2% royalty of the entire market gets you $600 MM in revenue, and with a generous net margin of 30% you're at $180MM net (historically net income is has been about 20% of sales) .. assume shares outstanding stays the same (it won't) and your at $1.67 eps using a 50x's PE ratio (inline with comparables) for 2001 earnings gets you to $83 per share... to show how ridiculously optimistic im being.. the sellside 2001 eps estimates are about .50 per share but then maybe i'm just not smart enough to realize that a 230+ forward P/E ratio is reasonable in addition. the money flow charts for block trades (institutions) is negative and declining... the nonblock trades (retail,etc) have been positive and increasing smells like speculative excess to bet long.. you have to a really really bullish view on the prices of dram over the longterm... which is unlikely to last given the historic cyclicality ... all the other upside is already priced in... as for the settlements.. the low lying fruit has fallen off the tree... and it'll be awhile before they get the bigger stuff

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