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Technology Stocks : Rambus (RMBS) - Eagle or Penguin -- Ignore unavailable to you. Want to Upgrade?

To: Don Green who wrote (22090)	6/8/1999 9:34:00 PM
From: REH	Respond to of 93625

Rambus Shares Surge On Micron Technology Sample Shipments Dow Jones Online News, Tuesday, June 08, 1999 at 20:55 By Anthony Palazzo, Staff Reporter BUENA PARK, Calif. -(Dow Jones)- A tacit endorsement from one of its biggest detractors lifted Rambus Inc. shares 13% Tuesday and sent short-sellers running for cover. Shares of Rambus (RMBS) rose $9.875, or 13%, to settle at $87.75. Volume was 3.46 million shares, compared with average daily volume of 1.17 million shares. Late Monday, Micron Technology Inc. (MU) surprised investors by announcing it shipped samples of memory chips using Rambus technology, called RDRAM, to Intel Corp. (INTC). Micron has been the most vocal memory-chip maker protesting a pending shift to Rambus's faster memory-chip architecture, said Drew Peck, an analyst with SG Cowen & Co. The memory-chip makers don't like using Rambus's designs because they have to pay a fee, Peck said. Many hedge-fund managers who were short of Rambus shares expected Micron to drag its feet on RDRAM, Peck said. When fund managers short-sell a stock, they are in essence betting that the stock price will go down "Much of the basis for being negative (on Rambus) has been based on the comments Micron has made," he said. "This seems to be a step in the opposite direction." On May 14, short interest in Rambus, of Mountain View, Calif., was 6.15 million shares, or about 26% of all its shares outstanding. May short interest rose 21.4% from April. Alternatives to RDRAM are in the works, but those efforts aren't as far along as RDRAM. Microprocessor heavyweight Intel's strong endorsement of Rambus has also bolstered its position. "Micron is expected to be a key player in the successful ramp of RDRAM platforms in the second half of 1999," said Pat Gelsinger, general manager of Intel's desktop products group, in the Micron Technology announcement. Production volumes of the devices using RDRAM will be available in the second half of this year, for use with Intel chips running at speeds of 600-800 megahertz. Micron Technology never said it wasn't going to make RDRAM chips, Peck said, but the perceived shift is a blow to hedge fund managers who sold Rambus's stock short. "If you're short Rambus, as many hedge funds have been, your first reaction is going to be to cover your short, and ask questions later," he said. "That's what happened today." Rambus Chief Financial Officer Gary Harmon said that while it is true Micron Technology complained about the licensing fees, it has been a licensee of Rambus for some time. "All along they have been working on the technology," Harmon said. Intel's investment of $500 million in Micron Technology last year also provided Micron with capital to invest in the new chips, Harmon said. -By Anthony Palazzo; 714-739-5538; tony.palazzo@cor.dowjones.com Copyright (c) 1999 Dow Jones & Company, Inc.