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

To: Ibexx who wrote (2382)	11/20/1997 7:22:00 PM
From: Boplicity	Respond to of 93625

Thanks Ibexx. Greg

To: Ibexx who wrote (2382)	11/20/1997 8:52:00 PM
From: dougjn	Read Replies (1) \| Respond to of 93625

Ibexx..great post. BTW, Logic of H&Q princing model suggests $85 NOW. That is, assuming the logic you laid out is what H&Q used....if one discounts forward 2001 earnings (from viewpoint of end of 2000) back not 2 years, to sometime 6-12 months from now, but 3 years, to NOW, at the greater certainty 20% rate, get 85 now. Actually, you assume a 20% discount rate. When I run those numbers on your estimated 155 at end of 2000, I get 108. At 25% discount I get the 100 H&Q predicted. At 25% I get $80 NOW. Even if I use 30%, I get 71 NOW. This baby's going higher sooner rather than later. Regards, Doug

To: Ibexx who wrote (2382)	11/21/1997 10:36:00 AM
From: Warren Gates	Read Replies (2) \| Respond to of 93625

OK, let's assume all these projections about RMBS will come true, however, why the PE of 40 on Y2001 EPS. All this hoopla about RMBS receiving $$$ without even manufacturing anything is hogwash. Earnings are earnings whether it's royalty payments or done the old fashioned way. Now a PE of 40 means they believe RMBS will grow at 40% rate beyond Y2001. Anybody really could see this far off? So what will Intel's earnings be at that point, and shouldn't it deserve a price now based on 40X Y2001 EPS estimates. The royalty that RMBS will receive is accounted for as part of gross expenses of the future DRAM manufacturers. So why shouldn't they be selling at 40X Y2001 EPS as well. After all, they will probably earn at least 5X more what they'll pay RMBS. I believe this is a distribution ploy by HQ, and will short this stock. Will sell some covered puts as insurance. Premiums are huge.

To: Ibexx who wrote (2382)	11/22/1997 2:34:00 AM
From: Andrew Shih	Read Replies (2) \| Respond to of 93625

I've been reviewing the report from H & Q, and have been wondering a few things. 1) What is the size of the DRAM market today? What is its growth rate? 2) Why the 40x forward P/E multiple for CY2000 EPS? Does the DRAM market grow at 40% a year and if so, will there be no competition even in 2001? 3) Why a 20% discount rate? If you're giving it a 40x multiple why not discount by 40% a year? When I look at this company it is obvious that it will grow at an astounding rate. But the stock seems to be way ahead of itself. With a P/E ratio in the hundreds, it seems that much of the future is already priced in. Isn't it funny how everyone will pile into a stock like RMBS trading at a few hundred P/E ratio while COMS is trading at something like 15x future earnings?