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Politics : Ask Michael Burke -- Ignore unavailable to you. Want to Upgrade?

To: Earlie who wrote (81904)	6/24/2000 12:30:00 PM
From: Joan Osland Graffius	Read Replies (1) \| Respond to of 132070

Erlie, If you are correct and this is a method for all involved to make some profits for their efforts and of course the employees at RMBS to obtain their windfall, then they will need help to keep the stock soaring while these folks are taking their profits. Zeev was correct with MU when INTC and TXN needed to unload their investments. The big question is who is going to play along and how long does this game need to be played until they walk away and the bag holders loose their shirt. MU is still holding its price while these guys are dumping as fast as they can, looks like we could have a year or two with this one or maybe longer. Of course a high tech sell off could put a crimp in the game. Joan

To: Earlie who wrote (81904)	6/24/2000 12:36:00 PM
From: Zeev Hed	Read Replies (1) \| Respond to of 132070

Earlie, I believe that the RMBS "story" is a multifaceted question involving troth fundamental aspects relating to IP, the semis and particularly the DRAM cycles and INTC's long range strategic goals. These various facets direct my thinking long term relative to RMBS. To discern the short term gyrations over the next 12 months, I use technical tools, but that within a framework of the facets mentioned above. INTC sure knows how to "play" the market here (both in MU, the "scenario" and RMBS's warrants), but I doubt that they will deliver 20% of RMBS based system (the condition for their warrants to be effective, their cost now is $2.5/share on 4 MM shares, if memory serves) just to make a $billion on RMBS stock and in the process lose their hegemony in the CPU market place. Now, it might be interesting to see what the actual agreement language was, was in based on 20% market share for DRDRAM, or 20% market share of DRAM covered by RMBS' intellectual property. I believe the former, but know not for sure. My point is that INTC basic strategy is to make sure that no part of a PC (and later the plethora of CPU bearing devices that are not full fledged PC's) be limited by anything but the CPU performance. If that tenet is not maintained, CPU's become commoditized and profit margins will be compressed. INTC makes its profits on the high price high performance sector, not the $50 variety of CPU's. I still think that INTC has determined the Rambus' approach to be the more viable to respond to this need, and it will be a mistake, IMHO, to assume that the current premiums on RDRAM are indicative of intrinsic price differential problems. It will therefore also be a mistake to assume that INTC backing of RMBS is waning. As for RMBS' IP covering DDR an SDRAM, I have no way to determine the validity of that claim, but in future court deliberations, if these come due to other "Dramurai" like MU not buckling, the fact that Hitachi and Toshiba did buckle will serve as an important (albeit not "legal") precedent whether it is openly admitted or not. Thus, until the TA tells me a different story, I'll have to assume that the legal battle is simply over. The current price of RMBS already assumes that RMBS will get royalties on the whole DRAM market, IMHO. I agree with you that we are closer to the top of the current semi cycle than most "prognosticators" lead us to believe, and RMBS stock will be severely deflated from its top once the realization that a new semi down cycle is in progress. However, that "top" is not yet in (I "see" a potential of $165 to $180 as the general area of overvaluation topping, not too far from current peaks). Very soon, IMHO, "forecasting" the price of RMBS' stock will be reduced to forecasting the general semi cycle and its movement may parallel that of MU, the only difference will be that MU may again go into periods of severe losses and cash flow straights, while RMBS, not ladened with huge capital expenditures to "keep in the game", and getting paid royalties whether or not the Dramurai make any money. Note, my "forecasts" on these have always been on the low side (my high for this cycle on MU was $60, adjusted for split, and so far, it seems that MU is on its merry way to the 1995 peak of $95 (or double that peak, I should say, post split), so my RMBS "high" might be off by a similar amount, getting us well over $200 as a peak valuation. Good luck out there Zeev