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

To: IceShark who wrote (30825)	9/27/1999 12:40:00 PM
From: Allen champ	Respond to of 93625

FOOL PLATE SPECIAL An Investment Opinion Rambus Run Over By Brian Graney September 27, 1999 Chip enhancement technologies developer Rambus (Nasdaq:RMBS - news) was beat up for a second straight day after chip giant Intel (Nasdaq:INTC - news) confirmed speculation from late last week that it is delaying the launch of its new 820 chipset, which goes by the James Bond-esque codename Camino. The Camino launch was supposed to be the debutante ball Rambus shareholders have been waiting for, since the chipset will feature the company's RDRAM performance technology for dynamic random access memory chips. In a press release today, Intel said the launch delay is due to "platform validation issues that may result in memory errors." Specifically, various news services have reported that signal integrity heads south when a third memory slot is used with the chipset. Because of the goof, some PC original equipment manufacturers (OEMs) are reportedly reluctant to ship Camino-equipped computers, which would only be able to support 512 megabytes of DRAM in two slots. Intel and Rambus are trying to figure out a workaround solution to correct the problem, which would enable OEMs to ship the current boards without a full-out board redesign. Whatever the ultimate solution, the damage to Rambus' high-flying stock price has been done. Intel and OEM Dell Computer (Nasdaq:DELL - news) continue to throw their support behind Rambus and RDRAM, so at least investors can take comfort that the Camino dilemma apparently has nothing to do with the memory technology itself. Rather, fault for the delay will likely fall on the doorstep of the chipset or motherboard designers. Still, the problem will likely push out the adoption of RDRAM for another few months or at least until a new version of the chipset is readied. That scenario will also push out the time it will take for Rambus to live up to its lofty forward profit multiple, which stood as high as 290 times the First Call fiscal 1999 mean estimate of $0.31 per share at one point last week. Amazingly, that multiple has changed very little since late last year, when semiconductor analysts were using it as a punchline for jokes at swanky holiday fetes. "Rambus at $94 is overdone," one chip analyst told The Wall Street Transcript on Pearl Harbor Day last year. "It has little to do with sanity and everything to do with the Motley Fool crowd," he continued. What investors need to decide at this point is whether Rambus' technology will ever live up to the expectations built into its share price, even at today's reduced levels. Wall Street is starting to lose confidence, with three analysts lowering the company's rating over the past two days. Proper execution from here on out will be critical if the company wants to make a successful run at "locking in" RDRAM as a standardized replacement for today's current SDRAM technology. But with every delay from main sugar daddy Intel, the company's potential competitive advantage in this space comes into doubt. Rambus may end up one day surprising the Wise and ultimately live up to its potential, but the ride along the way will be anything but smooth.

To: IceShark who wrote (30825)	9/27/1999 12:52:00 PM
From: RetiredNow	Respond to of 93625

I agree. The waters are still very murky. Even after today's slam on the stock price, I still think that the risk outweighs the potential rewards at this point. I am just glad I got out at $76 with a nice profit. It could have been much worse.