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

To: FLSTF97 who wrote (28616)	9/3/1999 10:22:00 AM
From: grok	Respond to of 93625

Glad to see you working with these numbers. One thing to realize is that the revenue steam from royalties on their Direct Rdram IP (that's the one that matters) has not even begun yet but still they have been profitable for the last 11 quarters. Their costs are well contained since the engineering work is finished. So the royalty ram should be pure gravy. But what PE multiple will the market give it? Or price to revenue? It is currently around 300 PE. If earning increase by 10x will PE come down to 30? Or will PE remain high because it has great profit margin and great Return on Invested Capital? How about this one: assume that someday it captures 100% of the dram market but then assume it just tracks up and down as the dram market goes through its legendary girations. Should it have the multiple of a dram company? Many questions, few answers.

To: FLSTF97 who wrote (28616)	9/4/1999 11:45:00 AM
From: Dan3	Read Replies (3) \| Respond to of 93625

Re: Can somebody help me understand their revenue streams? Most of the current Rambus revenue is from one-time initial licensing fees. siliconinvestor.com I agree with your analysis - an awful lot of unhatched chickens have been counted by the Rambus longs. There is an upside ceiling but no downside floor. Dan

To: FLSTF97 who wrote (28616)	9/5/1999 2:56:00 AM
From: Bilow	Read Replies (1) \| Respond to of 93625

Hi FLSTF97; Regarding the RMBS revenue stream, and the prospective P/S... The problem with projecting high P/E ratios based on the fact that the RMBS revenue stream is royalty based, and that therefore earnings are high compared to revenues, is that the revenue stream is highly dependent on technology. The payers of royalties to RMBS are not very pleased with it, and you can be sure that they are working hard to reduce those fees, or even eliminate them. Consequently, investors expecting them to continue for the next 20 years are probably going to be unhappily surprised. Technology comes and goes, and so do the companies. -- Carl