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

To: gnuman who wrote (47264)	7/15/2000 3:08:20 PM
From: NightOwl	Read Replies (2) \| Respond to of 93625

Gene, This is very interesting. I am guessing that the anti trust talks at ADT prior to INTC's joining the discussion was for purposes of figuring out their bottom line for negotiations and that INTC was invited in to: 1) receive that information; and 2) to hear the Memory guys explain just how INTC might be "involved" in the case. Certainly I'd have to assume that everyone knows and expects RMBS and INTC will have their own discussions about this information. The important thing for RMBS in this scenario, is that it appears likely that the Memory guys do in fact have some sort of bottom line, settlement numbers, in mind and are willing to talk about it. They will also be using this 30 days to get an idea about the RMBS' response both legally and financially. At minimum they must be hoping to strengthen the the anti RMBS forces inside INTC and encouraging them to talk some sense into RMBS. I doubt seriously that they view litigation as a "good" alternative to resolve their RMBS problem. No matter how strong their case is, and even assuming they ultimately win, the verdict could establish some precedent that cuts both ways. If they were to win because of some issue other than the Dell/FTC/JEDEC theory, the ruling could come back to haunt their own IP business in the future. Lets say they assert and win on a theory of predatory, discriminatory pricing of the SDRAM/DDR licensing/royalty fees intended to restrain trade in all but DRDRAM. Well there are tons of differing license arrangements out there between these Memory makers and all types of folks. Having a court describe any memory licensing deal as having anti trust aspects will be risky in this litigation strewn country. Hell you can bet that RMBS lawyers are looking at ways of mucking up the water with some of these other deals right now. So I have to think that the Memory guys would like to be reasonable and find a resolution which will permit business as usual to continue on without judicial involvement and without killing off RMBS. But, and this is really the interesting bit, RMBS must know the politics of this business as well as anyone. They had to have known what line they were crossing when they made the claims for SDRAM/DDR IP compensation. They had to have understood the reaction it would bring from the Memory guys. So I have to think they were pretty damn desperate in so far as DRDRAM's ability to win the DRAM war on its own merits. Either RMBS' management are one brick shy of a load; they are all lawyers; or they made this decision as a matter of life and death knowing that their technology is going to be an also ran. But odds are that there will be a settlement of all this. Its in everyone's best interest. The trouble is RMBS will have to find some pretty sizable new bricks to threaten these guys with if they want to get anything like the kind of money they will need to support this stock price. Now its certainly possible that RMBS management will look at its war chess, the snail like pace of the legal system and the fact that they will hold the patents throughout the litigation, and figure they can ride this legal bone all the way to retirement, win or lose. This Bunkeresque mentality does surface from time to time. But its extremely rare. Particularly with a publicly traded company. Technology changes too quickly. And if DRDRAM does go out with a wimper subsequent earnings expectations will rapidly tank pending a litigation result more than 10 years down the road. So someone is likely to blink. Its just a question of who goes first. 0\|0