Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: Ibexx who wrote (2717)	1/8/1998 8:17:00 AM
From: Jeff Jordan	Read Replies (2) \| Respond to of 93625

IPOs don't get much hotter than this Rambus' wild ride By Darren Chervitz, CBS MarketWatch Tue Jan 06 09:36:26 1998 ÿIPO Market Year in ReviewYear in Review MOUNTAIN VIEW, Calif. (CBS.MW) -- The technology company made its U.S. stock debut on May 14 at $12 a share. Shares opened for trading at 23 3/4 and rose to 30 1/4 by the close of the first day. The gains kept coming, and on a Monday about three months later, its stock soared more than 10 points to close at 84 1/2, a 604 percent gain over the offering price. The very next day, the stock plummeted 17 points. It regained all that ground in the next two weeks before beginning what was a gradual but mostly constant descent to about 45. ÿ Then, on November 20, the stock took off again, gaining about 16 points after an analyst at Hambrecht & Quist set a $100 target price for the stock, more than 185 percent above an original $35 target price set only six months earlier. At the end of the year, the stock was back at 45 3/4. The company was chip technology developer Rambus and its stock, which rose or fell by more than 3 points once a week on average, took investors on what was, without a doubt, the wildest ride of the year. ÿ "I just have no idea what the story is." Gary Harmon Rambus CFO Rambus executives stunned by volatility Even executives at Rambus were stunned by the stock's roller-coaster movement. "It's phenomenal," Rambus Chief Financial Officer Gary Harmon said when the stock hit a high of 86 3/4 in mid-August. "I just have no idea what the story is." Rambus' exciting business prospects were at least a part of the story. The Mountain View, Calif.-based company's chip-to-chip interface technology, which increases the rate data can be transferred between dynamic random-access memory and logic chips on a microprocessor, is well on its way to becoming a standard in the semiconductor industry. The technology, licensed to chip makers, is already used in a variety of machines, including the Nintendo 64 video game system. ÿ Not everyone is betting on Rambus' success. The stock attracted a large number of short-sellers. Starting in 1999, Intel's next-generation chips should also be incorporating an advanced version of the Rambus technology that the two companies are developing. Considering Intel's stranglehold on the chip market, a lack of competing technologies and a number of other major licensing deals Rambus signed this year, it's easy to see what made Rambus such a compelling investment. Royalty revenues will balloon According to H&Q analyst Rob Champlinsky, Rambus should generate $235 million in royalty revenue in the year 2001, with net income of $3.84 a share. RMBS NASD LastChg.53ÿ3/4+1ÿ1/8% Chg.Vol.+2.14%N/ADay Lo.Day Hi.51ÿ7/853ÿ7/8OpenPrev.53ÿ1/452ÿ5/8 As of Jan 08/98 8:14 am ET Last Trade Jan 07/98 4:00 pm ET 15 MIN. DELAY But not everyone is betting on Rambus' success. As the share price zoomed into the stratosphere, the stock attracted a large number of short-sellers, who sell borrowed stock in hopes of buying it back at a lower price and pocketing the difference. According to Nasdaq short interest data, more than 1.4 million shares were sold short in Rambus by the end of August, up from 640,000 shares the month before and about 44 percent of the float at the time. It's likely that the short sellers actually contributed to Rambus' huge-run up. When a stock has a small float, a huge short interest, and a dedicated base of momentum investors, its price movements are often exaggerated. As buy orders from investors come in, there need to be people willing to sell the stock. But with a small float, chances increase that not enough investors will be willing to sell unless the market price goes up. As the price rises, more and more short-sellers must cover their positions by buying back stock. The number of buy orders increases, forcing the price even higher until demand and supply are once again in equilibrium. This process, called a "short squeeze," is undoubtedly one reason for the wild fluctuations in Rambus' stock price. Analyst sees Rambus at $100 a share Going forward, Rambus is likely to remain a highly volatile stock. Champlinsky says an $100 stock price is a "lay-up." "There'll be a number of positive catalysts in the next few months that should propel this stock to even higher levels," says Champlinsky, citing Intel's developer conference in February as one such newsworthy event. At the end of November, however, the stock stood well off its highs at 55 11/16 and still had a short interest of 1.28 million shares. Whatever happens, CFO Harmon says he can't worry too much about the stock price. "You can't do much about it. We try and let the market take care of itself and run our business," he says.

To: Ibexx who wrote (2717)	1/8/1998 9:33:00 AM
From: Boplicity	Respond to of 93625

Thanks IBEXX, nice to see you around again. The 1997 Deloitte & Touche Technology Fast 500 Rank Company 5-Year City State 496 Rambus, Inc. 488 Mountain View CA Greg