Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: Tom Pulley who wrote (34290)	11/12/1999 9:24:00 AM
From: Dan3	Respond to of 93625

Re: If the technology becomes mainstream (40% chance in my view)... Hi Tom, IMHO, the expected value methodology you're using is the most reasonable one to use when evaluating uncertain outcomes. But I'd like to offer a few comments on the values you are using. And one other question, by "mainstream", what share of what size market are you projecting? More importantly, have you taken into account the recent information: ======================================== ebnews.com ...Qualified as a PC133 part, the new chip actually can achieve a 166-MHz speed, according to Hyundai... ======================================= The FAB technology that produces these SDRAMs should also give decent yields of PC800/40, unlike the present .18 parts where the majority of parts seem to be qualifying at PC800/45 or worse. Why is this significant? It indicates that SDRAM is continuing to scale, which is very different from the brick wall that was anticipated when the 100MHZ generation had so much trouble. It was this brick wall at 100MHZ scenario that made rambus look like such a good idea 3 years ago. Rambus, adding a layer between the chipset and the DRAM to allow for wide, slow memory to look like fast narrow memory makes sense if wide fast memory can't be built - which was the expectation. But the evidence is now that wide fast memory can and will be built. So the cost and added latency of the Rambus layer is no longer a reasonable approach. Things might be different had Intel's domination of the high end of the processor market continued, but the fact is that AMD has denied Intel the option of selecting a non price/performance competitive memory architecture for marketing reasons - Intel can't afford to do that any more. My own estimate is that the chances of rambus peaking at more than a 10% market share are now pretty slim. Regards, Dan

To: Tom Pulley who wrote (34290)	10/31/2000 10:58:07 PM
From: Tom Pulley	Respond to of 93625

Here is a view on buying Rmbs from someone who does not know if Rmbs will prevail or not. In fact, at the end of the day, perhaps no one knows for sure what will happen with Rmbs. Is Intc really bailing, will the price come down to a 10% differential with SDRAM, will DDR really work and be cheaper, will Rmbs collect on all SDRAM and DDR, etc. etc.???? Not quite a year ago prior to a 4/1 split, with as many or more risks, I posted the following: "If the technology becomes mainstream (40% chance in my view), I think we'll see $300-400 in the next couple years. If the technology dies out to a niche product, we'll see $10-20. Now I'll calculate that: .4$350 + .6$15 = $149 / share = 65% in two years. I like to see my risked estimates come to a 100% gain in two years, so I wouldn't buy at this point (I did buy in the 60's and 70's), but I'll hold and enjoy the posts from the longs and shorts." Message 11900818 Since then Rmbs is up 100%+ and has split 4/1, Rmbs is collecting royalties on SDRAM and will on DDR, and Rmbs is in other products as they said they would, which more than doubles their market. I still think there is a 40% chance that RDRAM will become the mainstream memory for PC's, but now if it doesn't there is a good chance that they will collect the royalties anyway from DDR and SDRAM (lets give it 30%), while the downside case now is that they will only collect royalties for RDRAM in workstations and other products. My updated calculation is .4200 + .3200 + .3*10 = risked share price potential in next two years of $143. Since this is triple the current price, its worth putting money into at this price....although not a large percentage of one's portfolio. An even better way to play a situation like this in which the upside is large and the downside is large is with Leaps. If the Rmbs story does unravel, the stock will be virtually worthless anyway, so you may as well hold leaps. If the Rmbs story works, we will know it within a year or so and the stock takes off and the Leaps are a grand slam. So, I'll add a some Leaps at this point, then back to lurking until next year at this time. Tom