Trufflette, this one was one of the last to go, it went late Friday. I am getting vertigo and have moved in the last two weeks to mostly cash, or have written covered calls against core positions.
I have been known to be quite premature and too early, and IMHO, RMBS has quite some future. I do not see $20 per share in the next two years, but $10 per share before the end of 20003 is visible, and thus the price range up to $400 could be achieved if the markets continue in their "irrational exuberance". By the way, I calculate that if the royalty rates on all RDRAMS are 1.7%, to achieve $20/share, some $27 Billions of RDRAM will need to be sold in a year, for the next two years at least, this seems to imply the whole DRAM market will be RDRAM, which I do not think will happen. I also assume that some of the larger producers probably have a scale down Royalties schedule, and MU could have a very special sweet deal. There are of course some good legal reasons that all licensees be treated the same (with volume thresholds) which would put some doubts in this hypothesis.
Zeev |
