Enjoying the action in RMBS?

Discussion in 'Trading' started by dumolcowboy, Jan 29, 2003.

  1. I've been a long term lurker, thinking I would never post. I can't resist in asking if anyone is enjoying the action in Rambus. It reminds me of the good old days of mania. Fasten your seatbelts, it might get bumpy!
  2. I didn't want to chase it at 8.08.

  3. Home > Investment Newsletters

    Forbes Newsletter Watch
    Rambus Man Has His Day
    John Dobosz, 01.31.03, 12:04 PM ET

    NEW YORK - When the U.S. Court of Appeals for the Federal Circuit in Longview, Wash., overturned a 2001 jury verdict against Rambus on Wednesday, shares of the company skyrocketed from around $7.50 to a close of nearly $12.50 on Thursday. Unfortunately most in the newsletter crowd missed this potential windfall.

    Sign up for Forbes' Free Investment Guru Weekly e-mail.

    According to Kevin Balfe of the Spear Report, none of the 30 newsletters and 60 model portfolios that Spear tracks had positions in Rambus (nasdaq: RMBS - news - people ) in the last three months. Spear uses a "consensus" system that follows the portfolios of some of the top-performing letters including the Coolcat Explosive Small Cap Growth Stock Report, the Prudent Speculator and Louis Navellier's MPT Review.

    One adviser that Spear missed was Fred Hager, editor of Hager Technology Research. Hager is the Swiss-born octogenarian whose high-risk stock-picking style helped him and his followers amass--and then partially lose--a fortune in technology stocks. In a conversation late last year with Forbes, Hager was absolutely convinced that Rambus would overcome its legal woes and rocket higher to $27. Hager was aggressively buying call options at the time on Rambus, and just this week bought more--this time January 2004 calls with a $40 strike price.

    The ruling on Wednesday tossed out a fraud conviction against Rambus for withholding information from a chip industry consortium, which adopted Rambus' protocols for memory transfer without knowing Rambus had patents on the technology. Rambus still faces antitrust charges by the Federal Trade Commission and it is the plaintiff in trials in Virginia, Delaware, California and Europe to force memory-chip makers including Micron Technology (nyse: MU - news - people ) and Infineon Technologies (nyse: IFX - news - people ) to pay royalties for using Rambus' technology. Should Rambus prevail in these cases, it could mean hundreds of millions in royalties for the tiny company.

    "If the court decision convinces Rambus' three foes to settle and sign SDRAM/DDR license agreements, Rambus' share price could easily go to $100 or more," writes James Rockwell in Hager's letter.

    Not so fast, says Manoj Nadkarni, a veteran of the chip industry and editor of Chip Investor. He says that although the decision in the appellate court on Wednesday was certainly a positive for Rambus, it still remains to be seen what the FTC will do with its case and whether a judgement or a settlement will compel the memory-chip companies to pay up. Nadkarni is staying away.

    Fred Hager's subscribers have some reason to cheer, but the crusty newsletter veteran will need a few more Rambuses to make up for the last three years in which, according to Hulbert, his portfolios have lost an average 42.9% per year.

    More From Forbes
  4. It is very exciting while extremely frustrating. RMBS is unique. When it made its now famous "run" of $70ish to $450ish in less than three weeks, it was bucking the trend of the Nasdaq at that time which had started its downtrend/bear market fall from the 5000 mark.

    Just when you think RMBS is done running, or if you say to yourself, oops I should have gotten in here, no way now after a 25% move in 2 hours, it still has allot left.

    On Wednesday, the court decision came in, RMBS ran hard for nearly 3 hours straight into the close. Yesterday it took a pause, but managed to close above the high of the previous day. If you get out a weekly chart, it was a very bullish sign. Todays run caps off a three day white stick run and thus has increased 100% in price pulling a complete double.

    From here, all bets are off. But I also said this when RMBS paused in the $200ish range a couple of years ago and yet still doubled from there.
  5. le140


    I think it's a perfect time to short that thing now that I've already cut my loss on the short side :)

    keep going up please RMBS so that I dont look that bad.
  6. i had almost forgotten what a good old fashioned squeeze looks like because its been so long since we had one.
  7. should be a nice short -- but wait for it to at least show signs of weakness before entering.
  8. BCE


    Actually, vhehn, I don't think this is a squeeze other than the people who have shorted it on the way up the last two days. :) Thought that myself at first but there were only 3.84 million shares short, a small part of the float which is also small. I think it's just speculation run amok and greed personified. Just like the old days. :)
  9. BCE


    BTW here's a 5min candlestick chart for today (1-31-03). http://www.geocities.com/bce111/RMBS_1-31-03.gif I though it had topped out at 13. LOL :D Shows how much I know. Was having problems with my RealTick today which kept locking up and totally missed the move. Pretty amazing. Just like the old days. :)
  10. I dont have a position in the stock, but people I know who have done their homework believe the court decision is worth a lot of money. The emphasis on -a lot-
    #10     Jan 31, 2003