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Technology Stocks : Rambus (RMBS) - Eagle or Penguin
RMBS 87.20-3.3%Nov 20 3:59 PM EST
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To: REH who wrote (13312)1/14/1999 5:07:00 PM
From: Bernard Super  Read Replies (2) of 93625
 
I've just finished wading through this afternoon's posts - and not one single person mentioned the fact - stated in RMBS' annual report - and clearly known to, and taken into account by Edelstone, that RMBS only gets paid royalties in the quarter following the quarter in which the chip maker ships. This is why the full impact of jul-sep quarter intro of Camino will only impact RMBS earnings in the oct-dec quarter.

The fact is earnings were exactly on estimates, and will continue that way for the next three quarterly earnings reports, as already predicted not only by Edelstone but essentially by all the analysts following the stock.

I don't believe we'll see a serious decline in the stock price (perhaps a very temporary dip) because most of the active float is held by institutions such as Fidelity that are simply not going to dump RMBS (if anything, they will be scooping up shares on any dips). They could not have been surprised by the earnings, and are in it for the long term potential.

Finally analysts have to come up with specific numbers - the growth rate number used by Edelstone is 75% (after a 150% surge). A person in his position has to pick a conservative middle ground. However, I am convinced that growth rate starting in fiscal 2000 (10/1/99-9/30/00) will be in excess of 100%.

I am still long on RMBS, but I did convert about half my holdings into longer term options and LEAPS last week.

Bernard
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