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

To: REH who wrote (3831)4/16/1998 6:24:00 PM
From: Estephen  Read Replies (2) | Respond to of 93625
 
"In 1999 the semiconductor market will be about 80 billion,"

REH, according to the recent morgan stanley upgrade of rambus, which was posted on this thread, the dram market this year is around 20
billion and 40 billion in 2001. I think that affects your projections.



To: REH who wrote (3831)4/17/1998 10:56:00 AM
From: TEColeman  Read Replies (2) | Respond to of 93625
 
<<I'm a retired computer executive that sits on the board of 6 computer companies in Europe and the US, none of which I comment on.>>

And I'm CEO on 3 Fortune 500 companies. :-) What relevance does this have to your valuation estimates? The Internet is the great equilizer, you've got to argue facts here.

You can't value companies at 130 P/E unless you're certain that their earnings growth is at least as high for the next 2 years. You have assumptions stacked on top of assumptions. (Size of the market, RMBS market share, %royalty fees, %R&D, %G&A, and most importantly - how the market will value RMBS P/E.

Where are the taxes in your calculation? Where is the competition? How are you estimating market share? Does the SLDRAM consortium charge royalties? Where will RMBS be if more fab houses decide to go the cheaper route?

There are too many unknowns to be making accurate estimates at this time. Will RMBS grow? Most probably. At this point I'm treating RMBS as a short term investment until some of these questions can be answered. IF you are right, I may not get in on the ground floor, but I won't be walking the ice floes either.

TEC



To: REH who wrote (3831)4/17/1998 1:34:00 PM
From: Armand Perez  Read Replies (1) | Respond to of 93625
 
REH - contracts can be cancelled and the "unused" portion refunded to buyer. Also, you don't take the whole chunk of deferred and plop it into one period to aid in your target P/E calculation. See GAAP guide at any friendly bookstore or obtain from the AICPA.

Beyond that, I'm speechless. In your masterful sophistic presentation, you said it all!

Besides, I was president of my 3rd grade class.


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