Some news actually, By Donna Fuscaldo Of DOW JONES NEWSWIRES Shares of Rambus Inc. (RMBS), which makes technology that speeds memory chips, climbed over 8% Tuesday after American Technology Research initiated coverage of the company with a buy rating. Calling Rambus a "swing for the fences" type of investment, Jeff Schreiner, an analyst at American Technology, said the Rambus story is misunderstood by many investors. According to Schreiner, who is banking on a positive outcome from the company's patent litigation, Mountain View Calif.-based Rambus should be viewed as a "high-octane, low-percentage holding that could offer tremendous upside potential." He said changes in the company's management and board have been positive developments for Rambus. For some time now, Rambus has been embroiled in a series of patent-infringement lawsuits with some of the world's largest memory-chip makers. The company is seeking royalty payments on its technology that speeds the performance of memory chips. Shares of Rambus are extremely volatile, seeing wide swings depending on how its litigation is going on any given day. The way Schreiner sees it, even in the worst-case scenario in which Rambus loses the ability to license and collect royalties, the company would still be worth $8 a share. Schreiner gave that scenario a 15% to 20% probability. Rambus would be worth $42 a share if it wins its litigation but sees royalty rates reduced, said the analyst, noting that the company would be worth $68 a share if its successful in its litigation and collects royalties. Schreiner gives the latter scenario a 40% to 45% probability of happening. "Rambus is a stock that is binary in nature and in our opinion really only has two outcomes," wrote the analyst. "Either Rambus is successful with litigation and/or licenses, or it is not." Schreiner, who set a $28 price target on Rambus, doesn't own shares and American Technology doesn't have an investment-banking relationship with the company. Recently shares of Rambus were trading up $1.30, or 8.1%, at $17.17, on volume of 12.9 million. Average daily volume is 8.2 million. Officials at Rambus weren't immediately available to comment. -By Donna Fuscaldo, Dow Jones Newswires; 704-371-4263; donna.fuscaldo@dowjones.com (END) Dow Jones Newswires 09-05-06 1216ET Copyright (c) 2006 Dow Jones & Company, Inc.
has been gapping up every day for a couple days now.. any signs of a short term correction? getting antsy.
today's rmbs news could give the reason for the necesary pullback...depending on how traders preceive it see rmbs breaking below 15dollars next wk. personally am hoping for a pullback to 1250-13dollar area to buy stock and write put options.. w
Dont say such terrible things , I'm long a large position in that stock. It does scare me that RMBS cant seem to hold 19.00 though... hmm
I wouldn't go as far as 13, I'd say a correction to maybe low 16 range... but then again, I could be wrong