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

To: Tiffany Trump who wrote (3496)	4/2/1998 8:56:00 AM
From: REH	Read Replies (1) \| Respond to of 93625

After Rambus announced that they licensed 1 billion dollars worth of chips I estimated that they averaged 1.5 % or 15 million. Since up to 1997 they only collected 5.8 million in royalties they must have made about 9 million in the last six months. The estimate was about 5.5 which means they could make 8 to 9 cents. Proplem is, three month ago they said earnings were going to be flat, which leads me to believe they might try to depress the earnings somewhat down to 8 cents. We'll see 60 very very soon reh

To: Tiffany Trump who wrote (3496)	4/2/1998 11:22:00 AM
From: MulhollandDrive	Read Replies (3) \| Respond to of 93625

Hi Tiffany, welcome to the thread. In regard to your question about the recent "eagle" run-up. If you check the RMBS chart, we had a runup on H&Q re-iteration of their buy recommendation, target $100. And of course the stock retraced significantly from there. This is a complete supposition on my part, but as I posted a couple of days ago,my gut feeling is that the short interest in RMBS is timid and tenuous, and therefore I feel many are quick to cover whenever it looks like RMBS could run. My hunch is the sharp up moves can partially attributed to that. Also, I think the only real rationalization for shorting RMBS at this point is a "valuation" call. Trouble is even among RMBS bulls there is disagreement on just how those valuations should be calculated. I'm more in the camp that RMBS technology model should be viewed more like a software model. Considering the ever increasing licensing contracts RMBS has garnered, one could easily draw the parallel of a RMBS with a MSFT. Since the interface architecture of RMBS is designed for all data transfer, the potential for licensing royalties is huge. Regarding the "flat" quarters going forward, might be strictly boilerplate stuff, but even if not, one of the difficulties I see forecasting the revenues is that the royalties are contingent on how well the licensees are doing, ie, Nintendo had a good fourth quarter, RMBS has a better than expected fourth. Doug has pointed out that earnings aren't nearly as critical as the establishment of the licensing agreements, and I agree with that on a fundamental basis. However, I think Wall Street has a penchant for numbers<g>. I also believe once the sequential growth rates have been established, we'll be looking a much higher RMBS share prices so while there is greater risk with RMBS at the current levels, waiting for earnings confirmation will cost. Of course, somebody could come up with a better mousetrap, but unless they've got the backing of INTC, I wouldn't be concerned. Take care, bp PS: Thank you for the compliment, but I don't consider myself "very smart" about RMBS, I yield that description to Ibexx, and many others on the thread. No techie here, just trying to look at the big picture.