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Strategies & Market Trends : Gorilla and King Portfolio Candidates -- Ignore unavailable to you. Want to Upgrade?

To: saukriver who wrote (40464)	3/15/2001 8:10:34 PM
From: tinkershaw	Respond to of 54805

What happens to Rambus' patent license revenue (from, e.g., Toshiba signed last June) if the underlying patent claims were limited to just Rambus' type of bus (don't extend to SDRAM or DDR)? This gets all the more confusing. The "bus" is not all the "Bus" has going for it. For the "Bus" to lose more than just a strict reading of what a "bus" is, is required. Each and everyone of the patents have to be gotten around. And I don't think that this can be done, or at least don't think it will happen. But I am in no way shape or form an electrical engineer and am not handling the case. So who knows. But still, given all the collateral evidence, I don't think this can or will be done. I think the patents are rock solid, even if a few are found not to apply to SDRAM. Enough patents will hold. The real danger, as I've stated before is the JEDEC claim. The judge is apparently allowing the plaintiffs to dig very deep and far inregard and has refused to give RMBS a summary judgment in regard. This JEDEC issue could make the patents unenforceable even if all are valid and being infringed. This is dangerous. What makes it more dangerous is that unlike the technical patents we are not privy to all the facts that will underly this issue. We are in the blind here. But, then again, even if the JEDEC count is made, just how far will it go. It seems like a long-shot that everyone of RMBS' patents will have been invalidated by any JEDEC misconduct. Also the remedy is uncertain. It may be totally non-enforcement or something far less. We don't know. For me, I diversified much of my RMBS holdings after the 12(b)(6) ruling. Up until that time it was risk-free as Rambus could only win but were certainly not going to lose through that stage. What accelerated my diversification out of RMBS was in late January $4 million + in stock sales by Geoff Tate. Now I fully expect normal inside selling by executive officers. However, Tate had come out with enormous confidence in the lawsuit. Despite this confidence, at a much deflated price should RMBS prevail in the suit, Tate sold $4 million shares in late January. Shares, that after a legal victory, which would probably be worth $8-$12 million. So I sold out my RMBS LEAPS at a nice 50% profit (said profit of course soon dissipated by reinvestments - what else is new in the god forsaken market) and now only own a small holding of RMBS. People, I just do not know what will happen here. There are facts which are beyond our grasp at the moment. I will say, that most likely, RMBS will win. Invalidating all of the patents whether through technical non-application will be nigh impossible, and not very likely even if the JEDEC count is upheld. Nevertheless, RMBS victory is far from certain. I am trying to look at this mess in more and more detail to see if I can see which way to go, because RMBS at $25 is certainly very tempting, but have not made a decision to re-buy at this time. But that is my current RMBS take. As an attorney, I know only too well that it is what you don't know that will kill you. And some of the rulings the judge has made have been very pro-Infineon. He is putting a lot of issues in front of the jury that may just as easily have been decided via summary judgment, and seemingly gone out of his way to give Infineon its say in front of a jury. I'll post on RMBS again if things become any clearer. At this time I'd have to place odds of 75% RMBS prevail at the suit and 25% lose, but that is hardly the type of odds we look for in gorillas. So as I've stated before, for those with high risk tolerance now is the time to get possibly enormous returns, but also at much greater than normal gorilla risk. For those more risk adverse, wait until the suit is decided. RMBS is very undervalued, should it win the suit, and there should be plenty of upside left. I may or may not buy some more tomorrow, but am currently playing it on the conservative side, because along with being shell-shocked via this market, the lawsuit is far from a certain victory, and Geoff Tate's suspiciously well-timed insider sales (and someone on the Fool said Tate has some $20 million worth of shares in the recent past) leaves one with less than complete confidence. But I did express this viewpoint on the Fool several times when I removed myself from the RMBS 100% club. So sorry people. I cannot clearly say here that buying RMBS at this level is a steal. It is more of a gamble at the moment the way the trial has developed. The trial has not gone as well, in preliminary motions, as many had hoped. Despite this I do still expect RMBS to eventually prevail with 75% odds. But on the gorilla board we do not invest on odds. So I would recommend only putting your high-risk (Globalstar type money) into RMBS at this point until things clear up a bit more. Tinker P.S. Regardless, RMBS' earnings from RDRAM and DDR should be more than sufficient to offset a loss at court in the long-term, but I doubt if the market will care in the short to medium term should RMBS lose this trial.