Friday, June 16, 2006

When Will Be the Next Check From the Courtroom? --- RMBS

RMBS (Rambus Inc.)

RMBS designs and licenses technologies used to speed communications between microchips, especially DRAM.

Its legal targets account for almost all of the world's production of DRAM. It filed several lawsuits against the big chipmakers. In March 2005, it inked a settlement worth up to $150 million with Infineon Technologies (IFX); and in April 2006, it won a pivotal $307 million jury award in its suit against Hynix. The ongoing lawsuits will bring it some big checks sooner or later.

It is a risky one also. There are factors you should keep in mind:
1. The insiders sold their stocks from $47 to $32. It was one of the big reasons that help the stock slide recently.
2. Its CEO sounds like not very Well Street friendly.
3. The SEC is investigating its option granting.

Even though, at the current price, RMBS is a very attractive one still. Any big win from the courtroom (probably not in the near future) would double or even triple as its current price. It is a good target for mid-term investors.

It closing price, as of 6/15/06, is $23.04.

My suggestion: Buy (7.5)
Instruction: Watch the news or any abnormal activity closely; adopt some risk control strategies.


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