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

To: Dave B who wrote (22114)	6/8/1999 7:45:00 PM
From: MileHigh	Read Replies (3) \| Respond to of 93625

Hedge fund managers short RMBS...from WSJ today... June 8, 1999 Dow Jones Newswires DJ Rambus Shrs Surge On Micron Tech Sample Shipments By ANTHONY PALAZZO BUENA PARK, Calif. -- A tacit endorsement from one of its biggest detractors lifted Rambus Inc. (RMBS) shares 13% Tuesday and sent short-sellers running for cover. 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 Rambus shares expected Micron to drag its feet on RDRAM, Peck said. "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." On Tuesday morning, Wall Street reacted immediately to the Micron Technology announcement. Rambus opened at 81 7/8, four points higher than Monday's close. By the end of the day, Rambus shares were up 9 7/8, or 12.7%, to 87 3/4, on very heavy volume of 3.46 million shares on Nasdaq. Average volume is 1.17 million. -By Anthony Palazzo; 714-739-5538; tony.palazzo@cor.dowjones.com --------------------------------------------------------------------------------