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Politics : Ask Michael Burke -- Ignore unavailable to you. Want to Upgrade?

To: MileHigh who wrote (61915)	6/10/1999 12:44:00 AM
From: Michael Bakunin	Read Replies (1) \| Respond to of 132070

Let's use a market multiple; that's probably too kind to a post-growth annuity. Assume the market remains high. At 30x the stock only gets to $120. Apply a discount rate. Given the risks, I think 20% is fair, even low. Your present value is... $83. I think it likely your share estimate is on the high end, and that to get there the company will probably have to cut royalties. Tweak the inputs a little and you can easily justify a share price in the twenties, even assuming some decent future successes. Say, 20x $2 earnings in three years instead of two.. and PV is $23. Really negative assumptions aren't necessary. -mb

To: MileHigh who wrote (61915)	6/10/1999 11:59:00 AM
From: John Stichnoth	Read Replies (2) \| Respond to of 132070

MH--The appropriate PE to assign is of course crucial. My problem right now is seeing an end-game for RMBS. Does RMBS go the way of the disk drive makers, for instance, making $10 per share in 2005--but unable to follow up on the RDRAM success with continued growth. I know you are familiar with the QCOM story. They built on the success of Omnitracs and Eudora to get to CDMA applications, and are looking forward to GSTRF success, and further growth in CDMA, for lots of further growth. So they're prospects aren't specifically limited. RDRAM has an end date. At some point, some technology comes along to do away with RAM entirely. The recent Hitachi announcement may be on point here. That suggests that in 10-15 years RAM will disappear. And it also suggests that RMBS may only earn PE multiples similar to the disk drive makers, when its market matures. So, do we have a stock with a 35 PE in 5 years, or an 8 PE? Your thoughts would be appreciated.