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

To: Orion who wrote (31166)	9/29/1999 4:29:00 PM
From: Jdaasoc	Read Replies (1) \| Respond to of 93625

Orion: RMBS is still a very speculative stock. You could have bought MSFT, IBM CSCO LU or INTC earlier today assuming you were buying a safe bet and have got clobbered today. The last thing I will claim is to know what RMBS is worth or what price it may trade at. What we are gambling on is that earnings could go up 50 times not 50%. My best analogy is that if RMBS gets into $1,500 computers with traditional memory price of $2/meg and 64 megs of RAM. I see the following in terms of sales breakout from that $1,500 Intel gets about $450-500 on chipset motherboard and microprocessor. MSFT gets $30 to $75 dependent on OS, RAM manufacturer gets $125. Of that RMBS gets royalties on Intel chipset $40 and RDRAM $ 125. So every computer generates about $2.5 per computer. Now compare RMBS's share to what Intel and MSFT get. It may look like RMBS gets very little. However, if you compare their business model with virtually non-existant expenses and current $2 B market capitalization for RMBS, you see that price for RMBS stock can go up very high and not become out of line with MSFT or INTC valuations. The whole line of reasoning falls on it's face if INTC and MSFT crash, which in a little way is what they may have started to do today. john