Doug, how can you be so negative on a stock if: (1) you haven't bothered to understand its products, markets, and competition, and (2) you haven't bothered to investigate its financials? Don't you think you should do that before you spread gloom and doom on the thread? You are certainly entitled to your opinion, but it is more helpful to everyone if you support it with factual underpinnings.
That being said, I still appreciate your comments.
The RamBus business model based on licensing is very interesting, particularly in the memory market. In the current DRAM market, the incredibly low prices have have resulted in very small current earnings for the DRAM manufacturers, who have invested incredible capital to design and fabricate the chips. It is conceiveable that a future price war in the Rambus DRAM market would slash the manufacturers' profits. However, Rambus would still make its 2% cut with little or no capital investment. Gross margin on licensing revenues is very appealing. Moreover, Rambus won't have to shell out patent royalty payments to competitors because it will not manufacture products that could infringe other companies' patents.
This business model is not without some significant risk, and as you mentioned, what does it do for an encore?
Regards,
BillyG |
