This is my weekendly stab at UMV, ultimate market value calculation for our difficult but charming friend Rambus.
Size of Dram market today: $25 billion (number courtesy of InStat (1)
Say, three years from now the market is $50 billion (WAG)
in four years, 60 billion, in five years 70 billion.
Say Rambus gets 70% of the market on average for those three years.
Then, for those three years, Rambus will have taken in:
.7 X $180billion X .015(royalties)=1890million or $82/share.
That's before taxes and paying the help and the landlord, which probably, except for taxes, would be negligible seeing as they are profitable now with revenues at a fraction of what is projected.
You also have to add on what they have on hand now and what they will earn between now and then, say (very roughly), 400 million, which brings the bottom line up to $100. So, it seems that stock price projections of upwards of 2, 3, and 4 hundred dollars assume that Rambus has quite a future beyond the six year picture outlined here, which in this biz is a little optimistic. So, I would say that Rambus stock price still represents quite a speculative leap of faith. BWDIK
(1) Paragraph 9: ednmag.com
wily
Note also the below average fund endorsement of Rambus. |
