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Strategies & Market Trends : NetCurrents NTCS -- Ignore unavailable to you. Want to Upgrade?

To: kha vu who wrote (6157)	3/16/2001 10:39:41 PM
From: kha vu	Read Replies (3) \| Respond to of 8925

RMBS: the stock that being cut into half within TWO days. <<<<Rambus' Shares Plummet in Wake of Lawsuit Speculation By Caroline Humer Senior Writer 3/15/01 8:01 PM ET Chip designer Rambus' (RMBS:Nasdaq - news) shares plummeted Thursday after a published report sparked speculation that a lawsuit is headed in opponent Infineon Technologies' (IFX:NYSE - news) favor. Investors grabbed on to the possibility that a decision in the suit would cost Rambus the royalty revenue it's after from Infineon and other chipmakers. They had driven down Rambus' stock more than 30% by the time the trading day was finished. It closed off $11.26, or 32%, at $24.09. Rambus doesn't actually build chips -- it designs and patents them and then collects royalty payments. The downward move is extreme even in this bear market and harkens back to the time when Rambus regularly moved 20% in one day on the mere suggestion of a turn in its uncertain fortunes. Whether this newest decline is justified -- or just the result of speculation and Internet message boards -- may be made clear Friday. The judge overseeing the case issued a ruling Thursday that will become public Friday. Infineon declined to comment on the contents of that ruling. Rambus spokesman Gary Harmon said that investors' interpretation of the ruling's impact -- whether it's for or against Rambus -- is wrong. Rambus is suing Infineon Technologies over patents that Rambus says it holds on two types of DRAM, or dynamic random access memory, called synchronous DRAM, or SDRAM, and double data rate DRAM, or DDR. As such, Rambus wants to collect royalties on the SDRAM and DDR that Infineon makes. Currently Rambus' revenue in general comes from royalties on Rambus DRAM, or RDRAM, which isn't at issue here. This suit is one of several that Rambus is involved in over similar issues both in the U.S. and overseas, but it's the most important one right now because it's the one closest to an actual trial, set to begin March 20. Speculation that the judge in the federal court in Virginia was leaning toward an Infineon-friendly ruling -- specifically a partial summary judgment on what should be included in the trial -- took off Thursday as a report published Wednesday by Cahners publication Electronic News Online gained momentum. The story cites judicial sources as saying that a pretrial ruling from the judge will limit the scope of Rambus' patents on DDR and SDRAM. This ruling is based on testimony from a hearing that took place in February. The notion became more credible on Thursday morning when investment bank SG Cowen wrote in its morning technology update, TechRadar, that the ruling had come down and was a clear negative for Rambus. The note said that the ruling had sided with Infineon on the scope of Rambus patents, saying that the patents covered the multiplex bus in SDRAM and DDR, which Infineon doesn't use. (SG Cowen hasn't done underwriting for Rambus.) "I think people are misinterpreting what the ruling might mean when it comes out," Harmon said. "This is a relatively minor part of a patent case." Harmon went on to explain that at issue in the ruling is the breadth of the definition of a technology term in the patents. If the judge chooses a narrow definition, that could make it more difficult for the jury to understand Rambus' claims regarding its patents, he said. "I think people jumped from that to, 'Gee, maybe the case against Infineon won't go forward and this will affect the case with Micron (MU:NYSE - news) and Hyundei and that will affect royalties from SDRAM and DDR,' and none of that is true," he said. The contents of that ruling, which wasn't actually issued until late Thursday afternoon, are scheduled to become public Friday, according to the clerk's office at the Richmond, Va., court. With the trial not due to start until March 20, investors now need to decide if they want to base their investment on what's in that ruling, and what it'll mean to the jury. >>>>>>>>