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I have such a hard time believing things are really coming to some sort of resolution. I sincerely hope that the long-suffering faithful finally gets theirs - financially and emotionally. I haven't had a position in years but still check the stock price occasionally. I noticed the spike in the stock and saw the Barron's blog article and decided to buy a few calls. I can't say I miss the emotional roller coaster, but I do miss the Rambus community. I hope everyone is well.
You're a trooper, TJ. I'm still pulling for you guys although I have no vested interest. I'd like to see Tate and Eulau do a perp walk but not sure we'll ever see that day. Good luck and Happy 2007 to everyone.
It's about time...
Outstanding Stock Options of Former Rambus CEO Terminated
Fool me once, shame on you - fool me twice, shame on me. That's my feeling on Rambus. I'm always tempted to get a piece of the action when the stock starts to rally on strong volume, but I'm once bitten, twice shy here - buck fever - can't pull the trigger.
The media has me questioning my better judgment with headlines that insist that Rambus received a favorable ruling from Whyte. Delay is rarely good. I'm quite surprised that Whyte would give any deference to the hacks at the FTC.
Any settlement now would be at suboptimal, IFX-like terms - pennies on the dollar. I will have to revisit my calculations on any news, but it may be that 20 bucks a share becomes the new "fully valued" number for Rambus, not 60 as I had once proposed. I guess 20 from 14 is ok.
Good luck.
As announced on July 19, 2006, the Audit Committee of the Rambus Board of Directors has reached a preliminary conclusion that the actual measurement dates for certain stock option grants issued in prior years differ from the recorded grant dates for such awards. During this period, Geoff was CEO and the sole member of the Stock Option Committee.
Didn't know this. I'm sure that crook is glad to resign - doesn't have to feel the heat from the average Joe sucker who bought this stock under his reign. Boy was I right when I said Geoff was in bed with the compensation committee. Now, I'd like to see Geoff relinquish his ill-gotten gains or go to jail or both!
Cal - sounds like you had a blast - looks like god's country to me. Who's that old guy in the pictures though? ;>
I'm still of the opinion Rambus can rise to spectacular heights from its current share price...
I hope you're right - I'd like to see some of the bagholders get filthy rich (or at least pretty dirty rich). There are some exceptional personalities on this board and others that deserve a payday.
Mr. Danforth earned his pay.
TJ - have a ton of respect for you, but I can't understand why you would defend Danforth. The guy exercised options with gross proceeds of over 10 million in a span of about 2 years - this is in addition to his very generous salary and bonus. How is Rambus substantially better off now than it was in early 2004? The war for past damages is seeminlgy lost. The stock is near a 52 week low. Management has committed fraud with the options shenanigans. Munger Tolles gets a 10 mill bonus? It's gut-wrenching to see the damage this company has done to its faithful shareholders. The only people that have made money on Rambus (other than lucky short term traders) is the mgmt and the lawyers. I suppose that's life - nice guys finish last. Bagholders pay the bills. I think everyone who follows this company should be disgusted with every bum in the executive suite - Danforth included.
Look out Below!
Skeptic, you still around?? Give us a holler here.
Not sure you really want me piping in. I'm watching from the sidelines - I got out at 29 but got back in at 22 only to sell at 17 when the double whammy of reduced damages and management fraud hit. This stock has cost me too much pain and too much in opportunity cost. The time and money I've wasted following this stock could have been put to better use elsewhere. I still check the stock price - notice it's up today on decent volume, but I can see this stock going back to 10 bucks, AT suit notwithstanding. I wish you and the other long suffering longs the best of luck. I will need to see some progress and some revenue/profit clarity before I jump back in.
I also want to see that motherfukker Bumbling Bob Eulau go to jail for scamming investors. As CFO, he was or should have been well aware of what was going on with the option price backdating and my guess is he was a beneficiary of it as well. He sure did get out at a sweet time. Like Fastow and Skilling, Bob and Geoff should be sending some time behind bars. I'm tempted to join the class action suits popping up all over the place.
Let me see, Intel has not re-signed, Hynix only has to pay 130 mill for years of infringing, the FTC is still trying to devise a way to screw Rambus, options expensing is eroding all accounting profits, we have mgmt that wants us to buy Coke, and former mgmt (and current board members) who have scammed us. Why would you want to be in this stock?
Good luck - sorry for the negativity - but you invoked my name! :>
TJ - you can get a CD yielding 5% now - you can thank me later for the free investment advice! ;>
You think Harry even slightly regrets suggesting that people sell the stock if they're not happy? Mr. Stuart has seen his wealth decrease by about 184 million since that comment. This board is quiet - I'll assume that people have just about had it with Rambus. Still waiting for Intel to re-up - I know Harry would not let me down.
Good luck.
Vesting for a portion of these CSEs and options granted in fiscal 1999 was contingent on an increase in the price of Rambus Common Stock to greater than $50 per share for 30 consecutive days. This target was achieved by the end of the second quarter of fiscal 2000, and resulted in a $171.1 million employee stock-related compensation charge taken in the same quarter.
What kind of metric is that for determination of vesting? Distasteful.
Well said longusa, but I don't think anyone really takes issue with incenting the talent and backbone of the company, the engineers. It's the dime-a-dozen executives who are receiving or have received all the option grants. Rambus would be no worse off if the entire executive suite up and disappeared. Some might argue they'd be better off.
Stark and Davidow and Eulau and Tate and Donnelly and HUGHES aren't worth the MILLIONS and MILLIONS that they've been paid. It's water under the bridge - I want to see all future grants properly allocated. Granting Hughes 250,000 restricted stock and making him the mouthpiece for the company was a mistake.
What price are you looking for to get back in?
Can't say I have a target price - want to see the stock stabilize before I jump back in. Still believe Rambus could eventually be a huge success - problem is I don't want to suffer the slow bleed until then. Not out, just less in.
It looks like a lot of people are taking Hughes' advice to sell. I took the opportunity to significantly reduce my position at 29 - out of shares and into short term call options - freed up some capital to throw into stocks with decent mgmt. I hope Harry's happy. I wonder if SS is taking the opportunity to lighten up as well. By my count, he's lost about 170 million of paper profits in a matter of weeks. If Stuart is anything like me, he is damn pissed off. Here's the latest on insider selling. CHEERS! :)
o DANFORTH JOHN D 0 0 VP Sell 05/01/2006 10,000 $38.90 51,352 $389,000
DUNLEVIE BRUCE W 5 4 D Sell 05/03/2006 16,000 $35.65 365,492 $570,400
o STARK LAURA 0 0 VP Sell 05/03/2006 59,772 $36.52 33,251 $2,182,873
DAVIDOW WILLIAM H 0 6 D Sell 05/09/2006 70,000 $36.24 678,102 $2,536,800
o PATEL SAMIR 0 0 VP Sell 05/09/2006 20,000 $37.53 85,898 $750,600
DAVIDOW WILLIAM H 0 6 D Sell 05/12/2006 30,000 $31.71 648,102 $951,300
Only about 7 million in sales so far this month - not bad!!!!
Didn't Cotchett say these 12 docs were DYNOMITE?
Stuart Steele
by: sjsjs1111 (64/M/Amherst NH) 05/10/06 07:50 pm
Msg: 990552 of 990560
He was talking to me when he said sell your stock if you don't like stock options.
HH is nothing but an empty suit. He should be kept away from the public after that performance today.
He will not get rid of me that easily.
Stuart Steele
Stuart - it sounds like you have been rattling some cages - thank you from the small guys whose stakes count in the hundreds not millions.
I see Hughes as coachable, established some relationship with him today, and intend to do some coaching.
What does 10 million get you these days? It gets you Harry. He was granted 250,000 restricted shares which I believe vest over 4 years - If the stock is at 40 bucks, that's 10 million and the best part is their is no "exercise price" - it's all profit. So for 10 million bucks and a damn generous salary and bonus, we get a guy who has no "emotional intelligence", cannot compose himself, makes inflammatory remarks during an AGM and shoots his mouth off in various industry rags. I'm still waiting for the promised Intel renewal - Q2 is here and quickly going.
I don't think Harry need look any further than Danforth for some emotional intelligence coaching. Danforth handled the situation well by listening, validating, and responding rationally. At least Danforth is earning his keep in that regard. Like the crazy options grants from years ago, I feel like getting too upset about Harry is crying over spilt milk. If he goes than some other creep will be hired to replace him and the options game will start anew. However, I certainly would NOT stick my neck out and defend the guy. He is supposed to be an industry veteran. LOLo - you can coach him all you want, but I'm afraid that old dog won't learn any new tricks.
I'm disappointed to read that you think that Rambus mgmt was the victim yesterday - Harry went on the offensive as soon as that options slide came up.
I'd rather see a guy like TJ up there and then maybe TJ could afford a cable modem or DSL. :>
lolo - at least you had the balls to ask a question - where is the guy with 8 million shares - you'd think he'd have a question or two he might want answered. I have to admit that I was trying to work and listen to the AGM at the same time so I didn't catch everything, but were you the guy that said something to the effect that you weren't going to ask about options again or something to that effect? Anyway - thanks for contibuting - I thought the Q&A was rather short.
I didn't get the anger or bitterness from Sharon that was clear with Harry. In fact, if she is the one responsible for signing Fujitsu, I say give her Harry's 250,000 restricted shares - he sure as hell hasn't earned them.
Oh well - I guess I'll just piss and moan and hold my shares hoping that the lawyers and engineers earn me some return on capital.
Harry is saying Rambus' addressable market size for 2008 is probably 300 billion not 1.5 trillion.
Hat tip to John Dowd! BRAVO!
Stock buybacks - doesn't anyone realize these are to support the options pyramid scheme.
John Dowd from Maine talking about QCOM vs RMBS - they've only had 300 million in option exercises vs 100 million at Rambus and QCOM is 27X larger. This guy is pissed and rightly so - he's right on. I hope Harry is squirming. He's saying he doesn't disagree with options - he disagrees with the degree of options granted. Right on!
Harry says Rambus is highly unstable.
Harry doesn't know how to run a company without stock options - I would argue that he doesn't know how to run a company.
Couldn't someone have given Harry a script - not sure why he thinks he should ad-lib. Talking about "Importance of Stock Options" now - my favorite topic - it gets me so pissed - I've got no problem with rank and file options - just don't want a few second-tier mgmt types making millions while the owners (us) hold the bag.
I'm listening as I write this - Harry is just babbling right now. CEO mumbo jumbo.
Cal - I hope someone asks your questions and other hard-hitting questions concerning option grants and compensation. I think it will be good for mgmt to squirm a little - I know I squirm a little every time I see another Rambus chieftan exercising millions more and diluting EPS. Between litigation (necessary) and option exercising, it is costing Rambus about 70 cents a year - that's huge.
Great analysis Cal! One comment - I thought it was known that Intel was 10 mill a quarter?
Couple takeaways - If .42 EPS is accurate, it takes a forward P/E of about 90 to get us to the current valuation. The deal with Fujitsu is looking like an even bigger coup than previously realized. Earnings impact in Q106 from options was .08 a share which is .32 a year which means given your analysis, we should expect Rambus to earn 10 cents this year! ;>
I'm anxious to see what, if anything, comes of the AGM.
I agree with TJ (I'm about to put words in your mouth ;>), Harold Hughes should be counting beans and counting his lucky stars not holding interviews. I think Poor Bloke is right, and I think Harry is a bumbling idiot. I will take back every word I've said if and when Rambus re-signs Intel. I've seen a lot of bravado from Harry and now a lot of sap. I want to see some consistency and charisma. Harry doesn't impress me as a fearless leader; he looks like he should be trying out for Revenge of the Nerds V.
It's a sad commentary on Rambus that its greatests stengths are its OUTSIDE counsel and technology invented decades ago. If Rambus some day truly succeeds (QCOM style), it will be in spite of executive mgmt, surely not because of them. If it were not for the resounding victory against Hynix, I would be voting with my feet.
This is how much confidence the executives at Rambus have in their future success. Since the win against Hynix, we have the following:
o PATEL SAMIR 0 0 VP Sell 04/27/2006 40,000 $39.28 85,898 $1,571,200
o DONNELLY KEVIN 0 8 VP Sell 04/28/2006 60,000 $38.71 28,042 $2,322,600
FARMWALD MIKE 0 0 D Sell 04/28/2006 25,000 $40.02 2,780,936 $1,000,500
o STARK LAURA 0 0 VP Sell 04/28/2006 60,000 $38.71 33,251 $2,322,600
7 million worth of options grants.
And can't we fire Laura Stark and Kevin Donnelly already? Those two have exercised over 11 million in options in the last year alone! What value do they add? Let's make some cost cutting moves and can them and bring on board some guys who will work for a fraction of the cost and probably bring more experience and some fresh insight.
I'm hoping that the AGM is a wake-up call for Mgmt, but my skeptical nature says that the Ramboids will be VERY LUCKY to garner 30% of the shares in dissent.
This is the exact language from the 10-k
An acquisition of all of Infineon’s DRAM operations could make it more difficult for us to obtain royalty rates we believe are
appropriate and could reduce the number of companies in our antitrust litigation
Our license with Infineon, which was part of our settlement, provides for the extension of certain benefits under that license to a
successor in interest that, under certain conditions, acquires all of Infineon‘s DRAM operations. If such an acquisition were to occur, such
successor would be entitled to the extension of such
10
Table of Contents
benefits, including the ability to pay a royalty calculated by multiplying the Infineon rate by the percentage increase in DRAM volume
represented by the successor company’s combined operations. Such an extension of benefits could also make it more difficult for us to obtain
the royalty rates we believe are appropriate from the market as a whole. Such an extension of benefits would, in addition, also operate to extend
a release of claims to such successor, thus reducing the number of companies to which we believe we are entitled to look for compensation for
the antitrust injury alleged by us in our pending San Francisco antitrust action.
Rambusmaximus - this seems pretty cut and dry to me and does NOT support your assertion. You response to Multi sounds like HOPE (hype, optimism, pollyana ism, exuberance) to me.
There's nothing stopping Micron from purchasing a majority of Qimonda on the open market.
Re Micron's interest--If they acquired IFX memory unit, would the Virginia settlement terms convey with it?
The answer, per the 10-k, is yes! This has been my concern for some time - however it was my bigger concern that Samsung would try to pull this. This is Micron's way of thumbing their nose at Rambus. So anyone out there trying to predict future revenue for Rambus needs to remove another 18% from the DRAM total market and instead substitute 6 million a quarter for two years. In other words, Micron will get out of the AT suit, get access to all Rambus IP, get out of reasonable royalties on (3.5% or greater) on DDR and its progeny all for the sweet sum of about 50 million.
This was a major mistake in the Rambus deal with Infineon.
The only silver lining is that maybe the FTC will go away - but at what cost???
Keep your eye on Pain and the RICO with Micron.
Didn't Jordan enjoin Micron from pursuing a RICO case in VA?
I happen to agree with you on the FTC - bunch of weasly bastards if you ask me. However, I disagree with most of the rest.
No analysts cover Rambus and Rambus was already lowered by BWS and raised by Hambrecht.
The difference between the Hynix infringement trial and the McGUire ID is that the verdict in the Hynix trial has little chance of being overturned unlike the politically charged FTC where those knuckleheads think they can do whatever they damn well please.
The Hynix case still has one more ember in the fire that could burn Rambus.
Given the overwhelming success that Rambus has had with Whyte in phase I and phase II and I have very little concern for the outcome of phase III.
The Alberta case even though it is now in Calif, should not be taken lightly
In front of Whyte, I think the Alberta case fails for a number of reasons - perhaps simply for statute of limitation reasons.
As far as Deja Vu - feels a little like the McGuire ID. The difference for me this time is that I'll be looking to buy if the stock keeps drifting south.
Payne is mostly out so you should be mostly in. I've done some number crunching on Rambus and that was before they mentioned the 1.3 trillion TAM and the 10 billion in AT damages - I think there is some upside. Patience is needed however.
Tomorrow, my third face of Eve will tell you something completely different.
2005 Annual Report
I know the 10-k has been available online for a while now, but I finally received my hard copy in the mail and just finished scanning it.
A few notes:
XDR DRAM has been selected for a number of as yet unannounced consumer electronic applications. These are still a mystery I believe.
For the twelve months ended December 31, 2005, revenues from Intel, Elpida, Toshiba, and Matsushita (Panasonic) each accounted for greater than 10% of our total revenues. In 2004, only Intel, Elpida, and Toshiba accounted for greater than 10%. I find this very interesting - two noticable absences to me: Sony and Samsung - for 2005 I understand no Samsung, but not in 2004 either? It's a reminder how important and faithful Elpida and Toshiba have been as well as Matsushita. Is it just coincidence that the Japanese recognize and appreciate the value of Rambus technology while the Koreans and the chumps from Idaho would rather litigate?
LOLO - you had opined on the most recent quarterly option expense and the effect of the volatility of the common stock which was spot on. Rambus uses the Black Scholes method to estimate the fair value of the share-based payments to employees. Black Scholes is heavily influenced by volatility of the stock price - Rambus has been very volatile this year (positively) rising almost 4 fold so it is not surprising that the expense for this quarter was so high. It is a very important reminder of the impact of stock options however.
A couple things on stock options - currently there are 26,027,517 stock options outstanding of which only about 2 million are currently underwater. The implication is that you have about 24% of potential dilution - this is huge - it's the difference between Rambus being worth 100 a share and 76 a share. Again, this is spilt milk but it's something investors should consider when attempting to value the company.
Related to this, about 2.1 million net options were granted in 2005. The good news is that the 6 most highly paid executives received only 250,000 of these all of which went to Harry.
Those 6 mostly highly compensated executives are: Harry, Geoff, Laura Stark (what does she do again????), Bob Eulau, John Danforth (damn lawyers :>), and Kevin Donnelly.
On this year's proxy, Rambus is proposing setting aside 8.4 million shares for issuance which they think will be enough for 2 years. I damn well hope so - that's potentially another 4% dilution a year. The incentive plan would include the following: stock options, stock appreciation rights, restricted stock, restricted stock units, performance shares, performance units, and other stock or cash awards.
Not bad.
Ooh - thanks for posting that Nic - it's one of those rare times that I'm actually right!
So far 86% of Ramboids on TMF think the stock will open at 45 or higher after the halt!
Just noticed I only have 10 posts remaining today... :(
``Hynix is obviously disappointed'' in the verdict, said Daniel J. Furniss, a lawyer for Hynix. ``This was one phase of the case, it's not over.''
They've been completely decimated on the first two phases - wonder if Mr. Furniss thinks the third times the charm. :>
That ruling will go on my fridge next to McGuire's ID and next to pictures of the kids of course!
Hard to say what's fair - it is more than I expected. The bigger deal really is that Rambus won on ALL counts. Not much to poke holes in and it should make the chances of a reversal at the appelate level all but impossible. I expect Hynix will try to settle. If I am Rambus, I would say - why not. You now have a jury saying that Rambus' patents are valid and infringed - not much more reason to hold out. Of course, the price has to be right.
The more I reflect on this, the more I realize that this couldn't have gone any better for Rambus. Even a Skeptic like me thinks Rambus kicked butt.
Cheer IHUB posters!
I am pleasantly surprised. It seems surreal. I guess I didn't need those puts that expired worthless on Friday afterall. Very curious to see which way the stock will go. If my reaction is any indication, I think we might see 50 bucks.
;>