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

To: Scumbria who wrote (44931)	6/19/2000 9:41:00 AM
From: GVTucker	Respond to of 93625

Scumbria, RE: This is a very good analogy, and is why I consider the Toshiba deal to be weird. The settlement appears to be way out of proportion. Here's a possible reasoning. Listen to the conference call again. When asked whether Toshiba is getting RMBS equity as part of the deal, a direct response is not given. Instead, (I'm paraphrasing here) the answer was, "Toshiba does not currently own an equity position in RMBS." Seems to me that this was an intentionally vague answer. The only reason that RMBS management would be intentionally vague is if Toshiba might be given some future equity interest in RMBS as part of this deal. Once you make this leap, then the logic of the rest of the deal starts to make sense. Toshiba doesn't have a huge market share of the DRAM market. A lot of their competitors do. Thus, by paying a larger royalty for DDR (possibly the technology that makes the most sense) they inflict greater harm on their competitors. In the process, RMBS is the benficiary, and Toshiba by virtue of its equity in RMBS, benefits far more than the minor hit that their small DRAM business takes.