Rambus (RMBS) - Eagle or Penguin Message Board

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Technology Stocks : Rambus (RMBS) - Eagle or Penguin

RMBS 99.46

+1.4%

2:57 PM EST

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To: Ibexx who wrote (2382)	11/21/1997 10:36:00 AM
From: Warren Gates	Read Replies (2) of 93625

OK, let's assume all these projections about RMBS will come true, however, why the PE of 40 on Y2001 EPS. All this hoopla about RMBS receiving $$$ without even manufacturing anything is hogwash. Earnings are earnings whether it's royalty payments or done the old fashioned way. Now a PE of 40 means they believe RMBS will grow at 40% rate beyond Y2001. Anybody really could see this far off? So what will Intel's earnings be at that point, and shouldn't it deserve a price now based on 40X Y2001 EPS estimates. The royalty that RMBS will receive is accounted for as part of gross expenses of the future DRAM manufacturers. So why shouldn't they be selling at 40X Y2001 EPS as well. After all, they will probably earn at least 5X more what they'll pay RMBS. I believe this is a distribution ploy by HQ, and will short this stock. Will sell some covered puts as insurance. Premiums are huge.

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